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It’s Not Disability Insurance – It’s Income Protection

Over the past couple years we’ve slightly modified the language around Income Protection.
 
The word disability is somewhat alarming and often evokes thoughts of being incapacitated or laid out in a hospital bed – it’s the reason we don’t refer to Life Insurance as Death Insurance.

Put in a more positive light, DI Insurance is really Income Protection for clients who want affordable, simple protection that can help cover bills should they be unable to work due to illness or injury.

Here are a few conversation starters you can use to help engage your clients in a conversation about Income Protection:
  • How would you protect your income should you be unable to work due to illness or injury?
  • How much do you have in savings?
  • Do you have enough set aside to make ends meet for a several months if you’re off work?
  • Where will the money come from when your savings runs out?
Why should you use these conversation starters?
They’re effective in closing the sale – although many clients recognize the need for Disability Insurance, the number of folks who actually get a policy is much lower.
 
Rather than trying to convince clients that they may be unable to work due to illness or injury (“spitting in the wind” as your grandpappy may say), selling DI as Income Protection focuses clients on how they would financially manage a disruption in pay – especially when the majority of Americans don’t have sufficient savings.
 
Lay out exactly how Income Protection fits in with their overall financial protection plan and how simple it is to get affordable coverage in just days – no medical exams or occupation classes are great selling points. Once they understand just how easy the process is, chances are they’ll be sold.
 
What’s next?
 
Simply let your clients know you are in the income protection business – they likely already want income protection but just don’t know where to get it. Plus, they’ll want to purchase a policy from someone they know and trust – You!
 
Also, many clients are probably unaware they can even purchase an individual Income Protection Plan – as odds are they’re under the impression they can only get an employer sponsored plan.
 
We have numerous options available, and can help you get the word out. Contact your Income Protection Specialist today for more information.

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Can Your Clients Afford A 58% Pay Cut?

A majority of employees have Disability Income coverage sponsored by their employer. However, they are unaware of how much coverage their plan would provide if they were to be too sick or hurt to work.

Many individuals live with a false sense of security regarding their Income Protection plan – believing that if an accident were to occur, they would be financially set until they could return to work.

The Reality
 
A typical group Disability Insurance policy covers 60% of their base income. This can be a good income replacement safety net. However, benefits are usually taxed and the remaining after-tax monthly benefit could be as little as 42% of a person’s regular base income.
 
For highly compensated employees, this amount could be even lower if there is a monthly benefit cap, or if incentive pay or bonuses are not covered by their plan.
 
The Solution
 
Fill the gap by offering an Individual Disability Income insurance policy in conjunction with the Group Long-Term Disability (LTD) insurance.
 
This additional coverage can bring your client’s income back to approximately 80% of their pre-disability earnings and can be offered on a simplified issue basis. With no exams or tax returns, they can buy up to $7,500 off additional monthly income protection.
 
Plus, when three or more lives are covered with Individual DI insurance policies and share a common employer, all are eligible for at least a 20% discount on unisex rates.
 
So, when your client says they don’t need an Income Protection plan because they are already covered through work, don’t let that be the end of your conversation. Find out exactly what their plan would pay them if they were unable to work, and if those benefits would be taxable to them. A small amount of additional coverage can put them right where they need to be: financially sound.
 
For more information on how you can provide your clients with the coverage they need – contact your Disability Income Specialist today.
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7 Things You Need to Know About Underwriting DI Cases

Everyone knows how hard insurance professionals work to prospect, set appointments, complete the fact-finding process, run quotes, close the deal, fill out and send in forms all just to submit a single Disability Case.

The last thing you want is for an application to be held up in underwriting because information may be incomplete or worse yet, declined because of medical issues.

It’s important to remember that the information required by underwriters helps the insurance company manage risk, which in turn helps to keep prices and products competitive across the market.
 
Here are 7 ways you can help your cases move through underwriting faster and more efficiently:
  1. Before moving forward with an application, know your client. Take the time to ask about their medical history, health concerns, and current medications. If there are red flags, allow our Underwriting Department go to go to work for you. We can pre-screen the client and direct you to a carrier that might be lenient with that particular medical concern.
  2. Answer all questions on the application and provide full details such as occupation and job duties as well as physician name, address and phone number. Make sure all required fields are completed. Incomplete apps may delay your case.
  3. Send a copy of the most recent illustration reflecting the correct occupation class, benefits, discounts and premiums.
  4. Attach all necessary financial documentation.
  5. When possible, submit the case for simplified underwriting with no blood, urine, EKGs, or APS required. Typically, if the client is between the ages of 18-50 and looking for a monthly benefit amount up to $10,000 this is the way to go. This program averages a 48-hour turnaround time once the application and TeleApp interviews are competed and received.
  6. While not required, it’s always helpful to attach a cover letter that discusses the details of the particular case. This helps to give the Underwriting Department a clear picture of the case, particularly if there are any unusual medical concerns or job occupation descriptions.
  7. You can complete the telephone health interview at any time. The application does not have to be in-house for the phone interview to be conducted and typically takes less than 20 minutes.
The tips on this list will save you valuable time and help you grow your business.
 
Contact your dedicated Disability Specialist today to learn more about how you can streamline the underwriting process!
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Not All Disabilities Are Treated Equally

If a severe disability struck, the kind where it’s impossible to perform life’s most basic activities without assistance, would your clients have enough income to get by?
 
Traditional income protection would provide approximately 60% of your client’s pre-disability earnings. However, your client’s expenses are likely to dramatically increase should a catastrophic disability occur.

By adding the Catastrophic Disability Benefit (CDB) rider to their individual Disability Income (DI) Insurance policy, clients could receive up to 100% of their pre-disability income to help cover expenses in those types of situations.

The rider offers a minimum monthly benefit of $500, up to a maximum benefit of $10,000 (depending on the client’s income). AND it is in addition to the base monthly benefit.
 
Together, the rider and base policy benefit replace a higher percentage of a client’s income to help them account for the extra expenses that often accompany a catastrophic event.
 
What’s Covered?
 
CDB benefits could be paid if your client is ADL disabled, cognitively impaired or presumptively disabled.
 
 
Contact your DI Sales Rep to learn more about income protection, and the advantages of the Catastrophic Disability Benefit rider.
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3 Things Employees Don’t Know About Their Disability Benefits

Protecting one’s ability to earn an income remains among the most important financial planning goals for many individuals.

Without income, many financial strategies can simply derail.

Yet, many employees with employer paid LTD plans could be under-insured in the event they became too sick or injured to work.
 
A new study released by The American College, Employer Perspectives on Disability Benefits, conducted by the Boston Research Group, shows:
 
  • Most group Disability Income benefits are taxable. Employees may receive a benefit that is only half their paycheck amount.
  • Few group Disability plans protect variable compensation. For employees who depend upon overtime pay, commissions and bonuses, the post–disability reality could mean not having enough income to meet their expenses.
  • High earners are maxed out. The maximum benefit amount in group plans limit benefits for highly compensated Executives and Business Owners.
For more information or sales ideas about Disability Income Insurance, contact your Disability Income Insurance Manager today.
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New Income Protection Solutions For Businesses

We are excited to bring three new solutions to your marketplace and the opportunities they present to help you grow your business.
 
Key Person Replacement Insurance, the Business Loan Protection rider and the Supplemental Health Benefit rider are only offered by a few carriers, which is why we are the place to go for Individual Disability Insurance (DI).
 
Key Person Replacement (KPR) Insurance:
 
This policy is an efficient way to provide business clients with the funds necessary to handle the loss of a key employee due to a total disability. Benefits can be used at the discretion of the employer, but common uses include:
 
  • Recruitment and training costs
  • Temporary staff needs
  • Indemnifies the company for lost revenue
  • Approved in 45 states
Business Loan Protection (BLP) rider:
 
In the event of a total disability, this rider reimburses the insured business owner for the covered business-related loan obligation. The rider is available on the HH 702 Overhead Expense (OE) Insurance policy. Examples of loans that can be covered under this rider include:
 
  • The purchase of a practice, existing business, equipment, building and/or land
  • The expansion of the business or practice
  • Facility renovations and improvements
  • And increase in working capital or build up of inventory
  • Approved in 46 states
Supplemental Health Benefit (SHB) rider:
 
This no-cost rider helps protect clients in the event of serious illness. It provides a one-time lump sum benefit equal to six times an individual DI policy’s Maximum Monthly Disability Benefit and Social Insurance Substitute Benefit if the insured is disabled under the terms of the policy and has coronary artery by-pass graft surgery, cancer or a stroke.
 
Please contact your Disability Income Marketing Manager for details and availability in your state.
 
*Not available in all states.
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Disability Income For Medical Professionals With Adverse Medical History

Medical professionals spend a lot of time and money advancing their careers and thus recognize the need for Disability Insurance. In order to address the needs of this target market, we specialize in providing coverage for those clients regardless of adverse medical, financial and personal history.

DI Case Study Example
  • General Surgeon – 4A Occ Class
  • Age 41| $300,000 income

Although the client was diagnosed with type-1 diabetes two years ago, is insulin stable and has no secondary issues, the client was originally declined for DI coverage due to the pre-existing medical condition. The client currently has a 60% income replacement ratio through their employer with a $10,000/mo cap.

The broker contacted our DI Specialist for alternative plan options. After review, and considering the pre-existing type-1 diabetes, we were able to secure an offer for coverage – the client was able to review multiple plan designs and select an elimination period and benefit period that best suited their premium budget.

Here is the DI solutions they chose:
  • $8,700 monthly benefit amount
  • 75% income​ replacement less underlying GLTD
  • 180-day elimination period
  • 7-year benefit period
  • No exclusion for diabetes!
  • $3,965.87 annual premium*
  • $4,521.92 with own Occupation Extension Rider
  • $360.89 monthly premium*
  • $411.49 with own Occupation Extension Rider

Our DI Specialists will work with you and your client to secure meaningful solutions with affordable premiums for your clients that feel they may not qualify for income protection due to health, occupational, or financial situations.

*IMPORTANT DISCLOSURE: The benefits, limitations and/or exclusions described herein are for general illustration purposes only and may vary by state and client profile.

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Expanded Guidelines Allow More Clients to Qualify for Disability Coverage

We can help you to write your first Disability Insurance (DI) policy or assist you in generating more production in the Disability Marketplace. Remember to ask your client’s about how they would pay for their various living expenses in the event that they could not earn their income at work due to sickness or injury.

If your client does not have a plan in place, you can help provide the solution.

To assist in providing you with the most competitive DI solutions, we have a number of carrier outlets for both blue and white collar clients. One of these carriers recently released their latest changes to product and underwriting guidelines.
 
Below you can find a summary of the various enhancements and changes along with a brief narrative detailing the impact of the change.
 
Expanded Select Occupation Discount
 
Guidelines have been expanded to provide for upgrades and discounts for more occupation classes within education and scientific fields. They have also added more Physician classes to make qualifying clients based on job duties considerably easier.
 
Foreign Nationals
 
Acceptable Visa’s expanded from only H1B, L1 and J1 to now also include O1 (Individuals with exceptional abilities in science, education or business) and TN (Canadian or Mexican citizens who work in the US) classes.
 
High Net Worth Clients
 
Individuals with a net worth up to $10M can now be considered for Individual DI. Clients with a net worth between $6M and $10M will need to be considered individually based on their “asset mix, nature and type.” This allows us to consider a traditional carrier outlet for the first dollar of coverage on high net worth clients before having to consider the surplus market.
 
IT Industry
 
IT solutions are changing the way we live our lives and it also impacts the job duties of our IT Professionals – we can now offer Top Occupation classes now available for IT Computer Programmers, System Analyst, Software Developers, and Database Administrators.
 
These enhancements make an already competitive product portfolio that much stronger. The occupation class changes will improve pricing, while the foreign national and high net worth client enhancements will allow you to provide DI coverage to clients that previously would not have been qualified for coverage in the traditional marketplace.
 
If you would like to obtain a quote or talk about what products may be available for your clients, please contact us today and we can help you to initiate and implement the sales process.
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Affordable Income Protection For Any Budget

The need for an income protection plan is not limited to the Executive, Doctor or Attorney earning in excess of $150,000. According to the 2020 U.S. Census Bureau the average annual income in the United States was $67,521 from all occupations.

Average everyday working people (Middle America) are just as dependent on their income to provide for themselves and their families as anyone in the higher tax brackets.

The opportunities are endless – reach out to your clients, friends, families, fellow club members and co-workers. Ask if they have an income protection plan in place should they get sick or hurt. Offer them an affordable plan to protect them and their family.
 
Of the advisors we speak with every day, Life Insurance Agents, Health Insurance Agents, and P&C Brokers – 92% are not talking to their clients about income protection and how affordable it can be.
 
You can differentiate yourself as an advisor just by offering valuable coverage to your clients that likely no one has ever spoken with them about.
 
Did you know?
 
The premium for a 45-year-old Office Clerk for $2,500 monthly benefit is only $51.00 per month. The premium for a 35-year-old Dental Hygienist for $3,600 monthly benefit is only $52.95 per month. There are even affordable plans for part-time Dental Hygienists and Registered Nurses working as little as 24 hours per week.
 
Talk about opportunities, there are over 192,800 Dental Hygienists in the US earning an average annual income of $87,530 (http://www.bls.gov/ooh/healthcare/dental-hygienists.htm) and 2.7 million Registered Nurses earning approximately the same income (http://www.bls.gov/oes/2011/may/oes291111.htm).
 
Never let premium be the reason your client’s income is left unprotected from an injury or sickness. The new, affordable Disability Insurance (DI) plans can fit most any budget. 
 
You are at the frontline to educate your clientele about the vital need for income protection in the event of an injury or sickness. Your clients want to buy income protection, but they need someone they know and trust to ask them about it.
 
Discuss Income Protection Insurance with all your prospects and clients, because they may not understand the risk of losing their income should an injury or an illness strike.
 
For marketing tools and sales ideas, contact your Disability Income Sales Experts today.
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Critical Illness Coverage Pays Up To $500,000 Upon First Diagnosis

While the chances of surviving a critical illness such as cancer, heart attack, or stroke are greater than ever. Living with the condition can create a severe financial hardship for many of our clients.
 
Traditional health insurance plans cover medical expenses such as hospital stays, physician’s fees and the pharmacy bill. However, additional costs such as the insurance deductibles, child care, insurance premiums, and home health care must often be paid for by the recovering patient directly.
 
Critical Illness Insurance pays a tax free lump sum payment immediately upon first diagnosis of any one of a list of serious illnesses – including cancer, heart attacks, or stroke.

Claims statistics suggest we are 5 times more likely to survive rather than die before we reach age 65 of cancer, heart attack or stroke.

The good news is, medical advances enable people to survive conditions that could have killed us years ago. For example, more than 90% of men diagnosed with testicular cancer are still alive 5 years after first diagnosis, and 80% of women diagnosed with breast cancer have the same survival rate. There are over 5.8 million stroke survivors are alive today, many of them with permanent stroke related disabilities.
 
How does it work?
 
We have access to several critical illness carriers that offer unique policies to meet your client’s needs. I have found one plan in particular that offers a very comprehensive benefit plan at a very affordable cost.
 
Think of putting your premium dollars into a safety deposit box and if you are diagnosed with one of the 12 covered illnesses (including Alzheimer’s) the policy will pay the face value. Or, if you die of one of the covered illnesses, the policy will pay the face value to your beneficiary. If you should die of any other reason, 100% of all premium paid towards the plan will be returned to the beneficiary as a tax-free death benefit.
 
While most critical illness policies have a reduction of benefit at age 65, we have critical illness contracts that extend the full benefits to age 75.
 
Consider this:
 
The likelihood of surviving a critical illness grows every year and so does the threat of being diagnosed. The coverage is very affordable. A male age 40 can secure a $50,000 critical illness benefit for only $52.56 per month. There is a plan to fit any budget with benefits up to $500,000.
 
Critical Illness Insurance is one of the best kept secrets in the industry and provides advisors a great opportunity right now to meet more clients, help more families and increase sales. Look to your clients with a family history of cancer, heart disease, or hypertension. They are very likely to be interested in purchasing protection before they are diagnosed.
 
Contact your Disability Insurance Specialist for detailed information about a plan that meets your client’s needs and budget.

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