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Sacrifice Your Daily Starbucks, Buy Income Protection

When it comes to achieving our goals of financial security, we are our own best friends – or more likely, our own worst enemies. It seems the average American is not setting aside enough money to achieve their financial objectives, let alone protect what they already have.

While the need for income protection is apparent, the majority of Americans have not purchased individual Disability Income insurance due to the misconception that it is too expensive.

Consider This:
 
As a financial advisor it’s your job to let clients know there are simple, affordable solutions to fit just about every need and budget. Ask your clients to think about the amount they may spend on a daily cup of premium store-bought coffee? A date night each month? A monthly cable bill? Movie rentals? For the amount of money they spend on these discretionary activities, they could work towards insuring their income.
 
Some clients may think they are saving money by delaying the purchase of Individual DI Insurance. But reality is that most DI policies allow clients to lock in an affordable premium – much lower than that of someone who waits, assuming he or she is even insurable at an older age.
 
Talk to your clients about income protection today. Through careful planning and follow-through, achieving financial security and protecting a lifestyle and dreams for the future are well within reach. Need tips on how to start the conversation? Contact your DI Specialists today.
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Income Protection – Statistics That Hit Home

With the access you have to your clients’ financial plans, comes the responsibility to protect their most valuable asset – the ability to earn a living.

Insurance is available for everything from a car to a cell phone, and it’s vital to remind your clients that those things don’t exist without the funds to facilitate them – which is exactly why income protection is so important.

The following statistics highlight the importance of having that discussion:
  • An estimated 48.9 million people, or 19.4% of the non-institutionalized US civilians, have a disability.
  • An estimated 24.1 million people have a severe disability.
  • An estimated 34.2 million people, or 17.5%, have a functional limitation
Social Security is not a reasonable resource on its own – the average SSDI benefit payment is a mere $1,256 for males and $993 for females per month.
 
Employer sponsored DI plans only pay 60% of a client’s income – plus, the benefits are taxable with a cap on the maximum benefit. And, less than 5% of disabilities occur as a result from an accident on the job – where worker’s comp would be applicable.
 
It’s a matter that every advisor should take to heart, especially when most of you know your clients on a personal level.
 
We have the tools for advisors to start the conversation about Income Protection. Contact your DI Associate today.
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Avoiding “Sticker Shock” With Disability Income Sales

Ever presented Disability Income Insurance to a client, and found that with one look at the price-tag they are reluctant to purchase?

While it is true that a DI plan could be costly for some – it certainly doesn’t have to be.

Avoid the “sticker shock” with your clients.
 
The general rule for the amount a client should spend on their Income Protection plan is 3% or less of their annual income.
 
If the premium is higher than the 3% amount, the client is more likely to experience “sticker shock” – and, even if you are able to place the policy, the likelihood of it lapsing is much higher. The client will then have no protection and you will not have a renewal commission.
 
How to keep premiums under 3% of a client’s income.
 
1) By adjusting both the Benefit Amount and Elimination Period (EP), you are able to make the policy more cost effective.
  • Adjust the benefit amount to cover just the basic monthly expenses such as rent/mortgage, utilities, groceries, etc.
  • Approximately 75% of fully underwritten policies have a 90-day EP – if your client has enough savings, offer a 180-day EP.
2) Creating a mixture of Base Benefit and Social Insurance Supplement (SIS) coverage, is another solution to keep a client’s premiums low.
  • The idea here is to get the most coverage for the lowest premium. Since the SIS coverage can be offset by Social Security, State DI or Workers Compensation, the premium is less expensive than that of the Base Benefit.
  • A good mixture of SIS and Base coverage can generally keep the premium within a client’s budget, yet provide them with the coverage to ensure their financial stability in the event they are unable to work.
A Fun Fact to share with your “sticker shocked” clients.
 
Over 80% of disability income claims are settled within 5 years because the client recovered and returned to work, or they passed away. In lieu of a less than 20% chance your claim will go past 5 years, a 5-year benefit can be very affordable.*
 
Not every client needs all the available costly riders the carrier offers – choose only the riders that will actually benefit a client.
 
And if in doubt of which rider(s) would be the most suitable – contact your DI Specialists to discuss the best options. We are here to help!
 
*Council for Disability Awareness
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Critical Illness Insurance: Preparing To Bridge The Gap

Many Americans are living without ample savings – and a lot are living paycheck to paycheck. When these families are struck with an unexpected illness such as a heart attack, stroke, or cancer, it can cause a serious financial hardship… even if they have health insurance.
 
The average annual income in the United States is $50,000 – and most health insurance policies carry at least a $5,000 or $10,000 out of pocket max that will easily be reached when suffering from a critical illness.
 
On top of that, any one of these illnesses will undoubtedly result in an absence from work for an extended period of time – causing the loss of valuable income at a time when they are experiencing increased expenses.
 
Consider This
 
This combination of out-of-pocket healthcare costs, loss of income, and mounting household expenses come together to form ‘The Perfect Storm’, which too often leads to a bankruptcy.
 
Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year-making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data.

Having health insurance doesn’t buffer consumers against financial hardship.

Most advisors sell life insurance to protect their clients should the bread winner not make it home from work one day. But how can we protect our clients against financial catastrophe if the heart attack, stroke, or serious illness doesn’t amount in a premature death?
 
Critical Illness Insurance pays a tax free lump sum payment on diagnosis of any one of a list of serious illnesses – including cancer, heart attacks, or stroke.
 
Claims statistics suggest we are five times more likely to suffer from one of these issues, than we are to die before we reach age 65. You don’t want to get a call one day, find out something has happened to a client, and regret having never discussed the opportunity to purchase a Disability Income or Critical Illness Plan with them – have the discussion with each of your clients as soon as possible.
 
Our dedicated DI Sales Reps are well versed on the features and benefits of Critical Illness Coverage – contact us at for assistance today.
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Introducing A One-Way Disability Buy-Out Policy For Business Owners

The average business owner is not prepared to have a spouse or relative step into the business in the event that they were unable to work. In most cases, any business owner would prefer passing responsibilities to someone who already understands the business and will know how to keep it profitable.
 
Issue a disability buy-sell option for your sole-owner business clients called a One-Way Buy-Out.

Offers the flexibility to allow a key employee of the business to purchase Disability Buy-Out (DBO) insurance to fund a buy-sell agreement between him/her-self and the owner of the business.

The process is very similar to that of a life insurance policy that funds a buy-sell agreement. The difference is, your business owner clients have an eight times greater likelihood of becoming disabled during their working years than passing away.
 
Advantages of One-Way Disability Buy-Out Insurance:
  • The disabled business owner is protected by obligating the Key Employee purchaser to buy-out the owner’s interest
  • The Key Employee purchaser is protected by providing the opportunity and funding to purchase the disabled owner’s interest
  • Prevents the sole-owner from having to find an individual to buy the business while he/she is totally disabled
  • Provides a smooth transition of ownership
  • Benefits are tax-free (premiums are not deductible)
Contact your Disability Insurance Specialist for more information on how to properly develop a Disability Buy-Sell Agreement between the business owner and key employee.
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Why Disability Buyout Matters in Succession Planning

When business partners plan for the future, preparing for the unexpected is key.

While many understand the importance of addressing the untimely death of a partner, the financial disruption caused by long-term disability often receives less attention.

Yet, a disability-triggered buyout can be just as challenging to manage.

Imagine this scenario: A partner in a successful multi-million-dollar company becomes permanently disabled. Who takes responsibility for their stake, and what are the financial implications? This was the reality faced by three business partners in a recent case.

The Problem

Their buy-sell agreement outlined a clear path for the repurchase of equity in case of death — a $15 million payout funded through life insurance for each partner. However, the agreement also required repurchase of equity after 12 months of total disability, valued at $15 million per partner. Unlike the death scenario, there was no funding strategy in place to fulfill this requirement. This oversight left the business exposed to substantial financial risk.

Without a plan, the partners faced tough choices: take on a debt of $15 million, or scramble for alternative funding. Neither option guaranteed the smooth transition needed to protect their business.

A Proactive Solution

To address this gap, we crafted tailored buy-sell disability insurance policies for the partners. With a lump-sum benefit triggered after a 12-month waiting period, these policies ensured that the buy-sell agreement was executed seamlessly, safeguarding both the company’s financial stability and the equity interests of all parties involved. In this case, the premium for the policy amounted to $27,600 — a small price for peace of mind.

Why Act Now

Integrating disability buyout funding into a succession plan is as critical as providing life insurance. Without it, a long-term disability could jeopardize both the affected partner’s financial security and the company’s future. As demonstrated, a well-structured strategy can prevent significant disruptions, ensuring continuity and honoring all partners’ stakes.

Planning ahead removes the risk of a crisis. Take the time now to explore options for disability buyout coverage with a trusted insurance specialist. It’s an investment in stability and resilience — keys to a thriving business.

Contact your Disability Insurance Specialist for more information or assistance with a case.

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Income Protection Could Never Be More Affordable Than Right Now!

When is the best time to buy an income protection plan? Could it be when my client is at the top of their earning years? Or when they are just starting their career?
 
The answer is, right now, before any health concerns arise that would preclude them from securing this valuable coverage. Before the premium is too expenses due to older ages.
 
Young couples (ages 30 to 50) are very important prospects for income protection. Start the conversation about income protection with young couples who have bought a home or are starting a family. This is the best time to build a foundation of financial protection.
 
Individuals in this age group still have a lifetime of earning potential. Income is their most important asset. Their lifestyle and long-term financial plans depend on the ability to work and earn a living.
 
Example: A 33 year old client earning $60,000 annually will earn $3,463,811 by age 67 with a 3% annual increases. Many would agree that this is an asset worth protecting.

An illness or injury that keeps your client from working can quickly impact other assets such as savings and retirement funds.

These resources could be depleted depending on the time needed for recovery and return to work. It could take years to rebuild these assets.
 
Who to Prospect:
  • Single, fulltime wage earners
  • New home owners or just started a family
  • Primary wage earners in families
  • Your current Life Insurance Clients
  • Auto policy owners with higher limits
Solution:
  • Talk to your clients about the value of their ability to earn an income. Explain what’s at risk. Potentially a lifetime of earning should they lost that ability due to illness or injury. (whatsmyeiq.org)
  • Show how disability income insurance can pay them an income while they recover to help pay expenses and protect their other assets.
  • Let your clients know that there is never a better time than now to purchase this coverage. The premium will never be lower and typically their health will never be better while they are still young.
We have a unique quoting tool (https://cpsinsurance.assurity.com/) and client approved marketing tools to help you prospect your current clients and reach new potential clients. Contact your Disability experts to learn more about growing this part of your business.
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Three Questions That Lead You To The DI Sale

Selling Disability Insurance (DI) is a delicate process. You know your clients need the protection, but the ‘hard sell’ angle can be too aggressive. Today, we are working in an environment where a subtle approach has proven much more effective when opening the conversation about Disability Insurance.

Instead of drilling your clients with horror stories about the difficulties they will face without having a DI policy in place, ask them the right questions in order to make the DI sale.

Three Questions That Will Start The Income Protection Conversation
 
Do you have an income protection plan, if you were to get sick or hurt and couldn’t work?
 
“No,” will be the response you will most likely hear, leading you to question two. However, you will have a percentage of clients that may have an Employer funded group plan – and most employees with Group Long-Term Disability couldn’t tell you what their employer sponsored plan would pay if they went on claim. Simply suggest they send an email to their HR dept for an electronic copy of their benefit book.
 
Most group plans will pay 60% of their earnings and is fully taxable to maximum benefit. After taxes, that monthly benefit plummets to around 43% of their earnings – a substantial pay cut, and many aren’t able to sustain their standard of living at only 43%. The opportunity is to have them buy a small personal policy to bring their income up to 65 to 70%.
 
How long would you be able to make your monthly bills if you couldn’t work?
 
This is where we would use the subtle approach to start painting the picture of what it is going to look like after an illness or accident. Ask your client how long their Savings, Retirement Plan, and Credit cards would carry them. 3 months? 6 Months? 1 year?
 
And where is the money going to come from after that?
 
Wait to let them answer. You are still painting the picture. Let your client know that you have an affordable plan that would protect their income if they got sick or hurt. Simply ask if they would like to learn more about it. You will have a percentage of clients who ‘get it’ and will want to learn more, and you will have those that don’t care. And that’s okay – as long as you make the effort to provide them the protection, when they are ready to buy, they will come to you.
 
These three simple questions will paint the picture for your clients and help identify their need for an Income Protection Plan. Please contact your DI Sales Rep for support with your Income Protection Business.
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Why Business Owners Should Invest in Disability Buyout Insurance

When a business has multiple owners, Disability Buyout Insurance provides funds to buy out the disabled owner’s share of the business. This ensures that the business can continue operating smoothly without financial strain.

The Importance of Disability Buyout Insurance

Without this insurance, a disabled owner’s share of the business could become a burden, leading to potential disputes and financial instability.

Who Needs Disability Buyout Insurance?

Any business with more than one owner can benefit from Disability Buyout Insurance. Whether it’s a partnership, a corporation, or a limited liability company, having this insurance in place can safeguard the business from potential disruptions caused by a co-owner’s disability.

How Disability Buyout Insurance Works

When a co-owner becomes disabled, the Disability Buyout Insurance policy is triggered. The policy provides the necessary funds for the remaining owners to buy out the disabled owner’s share of the business. This ensures a smooth transition of ownership and allows the business to continue operating without interruption.

Choosing the Right Disability Buyout Insurance

Factors such as the value of the business, the number of owners, and the potential impact of a co-owner’s disability should be taken into account. Working with an experienced insurance advisor can help in choosing the most suitable policy.

Conclusion

Disability Buyout Insurance provides financial protection and ensures a smooth transition in the event of a co-owner’s long-term disability. By understanding the importance of this insurance and choosing the right policy, business owners can mitigate potential risks and secure the future of their business. Contact your Disability Insurance Specialist to learn more.

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New Markets To Grow Your DI Sales

The need for an income protection plan is not just for the Executive, Doctor or Attorney earning in excess of $150,000. According to the United States Census Bureau, in October 2020 the Median Household 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 those higher tax brackets.
 
Your opportunities are endless – reach out to your clients, friends, or family.
 
Ask if they have an income protection plan in place should they get sick or hurt. You can offer them an affordable plan to protect them and their family. Of the advisors I 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 no one has ever spoke to them about.
 
Here’s an example:
 
Did you know that the premium for a 40 year old Male Office Administrator for $3,400 monthly benefit is only $41.63 per month? There are affordable plans for even part time Dental Hygienist and Registered Nurses working as little as 24 hours per week.
 
Talk about opportunities, there are over 192,800 Dental Hygienist in the US earning an average annual income of $97,250* and 2.7 million Registered Nurses earning approx the same income.
 
Never let premium be the reason your client’s income is left unprotected from an injury or sickness.
 
The new affordable DI plans can fit most any budget. The premium for a 35 year old Female Dental Hygienist for $2,500 monthly benefit is only $55.52 per month. A 40 year old Male Insurance Agent can purchase $4,000 monthly benefit for $60.28 per month.
 
Your clients want to buy Income Protection, but they need someone they know and can trust to ask them about it. You are at the front-line to educate your Middle America clientele about the vital need for income protection in the event of an injury or sickness and how affordable it can be.
 
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.
 
Contact your Disability Experts for Marketing Tools and Sales Ideas to help your clients.
 
*according to the Bureau of Labor Statistics

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