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Disability Buy-Sell Planning with a New Twist

We’ve seen how some traditional funding ideas for Buy-Sell Agreements have not met a client’s need as effectively as they should. Below is a unique way to look at Disability Buy-Sell Funding that may put your client in the best possible position.

Case Design:
  • 40-year-old Attorney, 25% Partner in a law firm worth $4 million
  • Current Annual Income $200,000
‘Traditional’ Funding Buy/Sell Agreement:
  • $1 million Term Life Insurance Policy in the event of premature death
  • $1 million Disability Buyout (DBO) Policy with 365-day Elimination Period (EP) & Lump Sum Benefit = $3,780 Annual Premium
‘Unique’ Funding Buy/Sell Agreement:
  • $1 million Disability Buyout (DBO) policy with a 730-day EP & Lump Sum Benefit = $2,880 Annual Premium
  • $900 annual Savings from ‘Traditional’
NOW ADD
  • $11,230 Monthly Benefit Individual DI policy with 90-day EP and 2-year benefit
  • $752 Annual Premium
  • $148 Total Annual Savings from ‘Traditional’

If the partner gets sick or hurt and cannot work, the Individual Disability Insurance (DI) policy will pay 67.3% of his income (tax free) for up to 2 years.

If the partner recovers from his illness or injury before the 2-year benefit runs out, he will not need to sell his shares of the practice, and he can return to work. Once he gets back to work full-time for 6 months, his Individual DI policy with 2-year benefit is reset and has a full 2-year benefit again.

The new plan design gives the partner more time to recover from the illness or injury – without having to worry about the company Buy-Sell Agreement forcing the firm to buy him out when he has recovery in sight.

If he does not recover after 2 years, the Individual DI policy benefit stops and the DBO policy will pay the partnership $1 million, tax-free, to help buy out his share of the business at current market value.

Contact your DI Specialist for more information about this strategy.

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Increase Your Sales With This Fast Track Sales Tip

It’s common for advisors to jump to the solution before making sure their clients comprehend what is at stake should they get sick or hurt and not be able to work and provide an income.

The first step, and the most important, is conveying the necessity for income protection to your clients.

Start by finding out what’s paramount to them. The things your clients value the most require the most protection: Family, Home, Financial Plans, Secure Futures – help clients identify what they can lose should something happen to their ability to earn an income, and acknowledge that it’s a problem needing attention.
 
Financial Security: If the paychecks stop, how will they pay their monthly bills?
 
Few middle income families have enough savings to make ends meet if they should lose their income for more than a few weeks. When the paychecks cease, monthly bills will begin to deplete savings – setting back plans or priorities, perhaps even for years. For these clients, the definition of income protection is about knowing they can meet their financial obligations and protect their future plans.
 
Supporting the Family: What changes will they face?
 
On top of losing a paycheck, a disabling illness or injury can mean changes for the whole family. Plans are put on hold, routines are changed, family members must pitch in more – and the calendar fills with doctor’s appointments, which leads to more medical bills, and the urgent question becomes, “When will things get back to normal?” It’s important for them to know there’s a way they can still support their families and keep life as normal as possible if they become unable to work.
 
Focus on Recovery: How will they recover if the stress of finances is haunting them?
 
The last thing someone needs when they’ve experienced a disabling illness or injury is the stress of worrying about bills and other financial obligations while they recover. It’s difficult enough to be facing an uncertain future without the constant worry of financial set-backs – it’s important to know they’ll have a plan in place and monthly Disability Insurance benefits which will help keep things on track, so they can focus on getting well.
 
Contact your Disability Income Sales Rep for guidance – we’ll help you identify the best solution for each of your clients’ needs.
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3 Ways To Get Your Clients Medical Bills Covered

Injuries and illness happen, and even when your clients have medical insurance, out-of-pocket medical bills can pile up, putting a strain on their financial security.

Clients may budget to meet their annual deductible in their medical insurance plan, but many are not prepared to handle the additional medical bills that can go beyond their deductible.

3 Solutions to Get Your Clients Medical Bills Covered
Clients considering an Income Protection policy now have the option to add additional protection in the form of a Long-Term Care, Critical Illness and/or Accident Medical Expense Benefit Rider which can provide additional protection to cover medical expenses for minimal or no cost at all.
 
  1. The Activities of Daily Living (ADL) Rider or Catastrophic Benefit Rider pays an additional monthly benefit in addition to the scheduled monthly benefit if your client is unable to perform 2 or more Activities of Daily Living (ADLs) without stand-by assistance or if cognitively impaired.
  2. The Supplemental Health Benefit Rider is similar in many ways to a traditional Critical Illness policy. This rider will pay a lump sum benefit equal to 6 times the monthly benefit if the insured has a stroke, diagnosed with cancer, or has coronary bypass graft surgery.
  3. Accident Indemnity Rider. When an accident occurs on or off the job, 24/7. The Accident Indemnity Rider pays fixed dollar amounts for emergency care, ambulance, diagnostic exams, surgery, and follow up Doctor’s visits. This rider pays even if there is no diagnosis of disability due to the injury. Coverage can include the insured’s spouse and children.
4 Ways to Present to Your Clients
  1. We offer customizable flyers, pre-approach letters, and client approved handouts – available to you, to provide your clients or prospects to generate interest.
  2. Prior to your appointments, consider sending your clients some educational pieces related to Income Protection and how the Additional Medical Expense protection works.
  3. At your appointment, first determine the Disability Insurance (DI) policy type and monthly benefit needed to meet your clients’ needs. When appropriate point out the features and the affordability of the added protection can be and the benefits it can provide.
  4. The riders are very affordable and can turn a basic disability policy into a comprehensive plan for little or no additional premium. Some riders will automatically pay a lump sum benefit and others will reimburse your client for medical expenses. There are some limitations and the riders are not approved in all states.
Please contact us for more specifics on how these benefits can enhance a product offering.
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7 Marketing Tools We Offer For Disability Insurance

Improve your Disability Income (DI) sales with any or all of the numerous marketing assets we have available for your immediate use.

We are here to help you design and add customized marketing materials to your catalog of DI sales tools.

Some of the marketing tools we offer include:
 
E-mails – Several Disability-focused topics are available to help generate interest with your clients. It’s a perfect opportunity to market a topic and attach a customized proposal.
 
Customizable Marketing Materials – We’re delivering on your requests for customizable materials to use in your local market. Using Adobe Reader, you can customize designated sections of several DI marketing materials.
 
Byline Articles – These are an excellent way to increase your credibility and position yourself as an industry specialist. They’re ideal for submitting to local publications and for use in newsletters.
 
Approach Letters – Use these for targeted mailings to prospects. Marketing material inserts are available to supplement the mailing.
 
Testimonials – One of the more popular approaches to selling Disability Insurance is to provide a “real life” story. Several testimonials showcasing the importance of income protection are available.
 
Client Seminars – Ideal for the worksite or for your own seminar, these presentations cover topics such as the Disability Triple Threat, The Need For Disability Insurance and much more.
 
From Here to Security – This is a comprehensive educational program to help share the importance of income protection. Many different types of materials are available, including a consumer education booklet and an interactive needs-based calculator.
 
For access and more information about these Disability Income Insurance marketing tools, contact your Disability Income Marketing Representative today!
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New DI Benefits for Physicians and Dentists

Business Overhead Expense (BOE) Disability Insurance is a cornerstone of a well-managed corporate financial plan. The coverage financially indemnifies the regular monthly overhead of a company in case of the partial or total disablement of the business owner.

BOE coverage allows a business to stay afloat while the owner is on the mend with the goal of getting him/her back to work.

Most plans provide 12 to 24 months of benefit after a short elimination period which can be the saving grace of business owners whose firms employ fewer than 50 employees. BOE plans are important insurances for small to medium business owners along most industry lines. However, there is a concentration of this type of coverage among medical and dental practices in the United States.
 
Physicians and Dentists find BOE coverage imperative due to the operational nature of their firms which have disproportionately-high monthly overhead expenses. Their overhead includes expensive equipment loans and professional staffing costs that most small businesses don’t usually encounter.
 
A common shortcoming of most BOE disability plans is that coverage excludes the salary of any employee with the same profession as the insured person. For physician and dental practices, this means that salaries of any other doctor or dentist on the owner’s payroll will not be covered even if the medical or dental professional is an employee.
 
We can provide a brilliant solution that will change the coverage scope of most physician/dentist BOE policies.
 
Now available is a Salary Replacement Benefit Rider which, in addition to the monthly overhead benefit, pays the monthly salary of the business owner’s replacement while the owner is disabled. The rider is an incredible benefit for your physician and dentist clientele as it allows all expenses to be covered as the business runs normally under the watchful eye of the replacement before the owner is able to return to work.
 
Hopefully you recognize how amazing this scenario is. The BOE policy, with the Salary Replacement Benefit Rider, covers the overhead as well as the salary of a replacement professional, allowing the business to run without the overhead costs. This translates into extra income for your client while he/she is disabled. Technically, if your client has personal DI in place in addition to the BOE plan, he/she could earn more while disabled than while at work!
 
Please contact your Disability Income Specialist to learn more bout the extra benefits of our Business Overhead Expense Insurance.
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Target The Easy DI Sale

We often hear advisors mention they don’t offer Individual Disability Insurance policies because their client base already has protection through an employer plan. While many advisors may choose to move on to another aspect of the client’s financial picture, it’s the experienced advisor that sees the true opportunity.

We’ve always found it easiest to present to clients who already own a DI policy. If the client is covered by a plan at work, they already know the importance of having a plan designed to protect their paycheck.

They recognize the value of the added benefit provided by their employer, but typically aren’t aware of the short comings of a group plan such as direct-integration, taxable benefits, and lack of portability. However, the existing employer plan serves as an excellent starting point to introduce the subject of proper income protection.
 
For those clients with existing coverage, commend them for having an existing plan in place. Then offer to review the plan to determine if it’s providing the necessary coverage it’s designed to provide by asking for a declaration page of their existing policy. With the policy declaration page and some basic client information, we can conduct a complete policy review showing the client’s current protection along with any recommended changes.
 
EXAMPLE:
 
Client: Male, 40
Occupation: Executive
Income: 100k with 25k in bonus
Current Coverage: 60% of Salary with a 10k Cap
 
Current Coverage: $5,000 per month (taxable)
Additional Coverage Available: $3,300 per month (non-taxable)
Underwriting: Just completed Application Part A and B. No Exam, Labs, or Tax Returns needed
 
If you want to target an easy Disability Insurance (DI) sale – the DI review is the easiest way to immediately increase your disability sales – work with your existing book of business to provide proper income protection. To learn how to best incorporate this strategy into your sales activity, contact your DI Sales Rep today.
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The Art Of Selling DI

Selling an Income Protection Insurance policy can be challenging, especially when your clients become overwhelmed with the terminology and options available.
 
Often times your prospects don’t know the criteria for the policy that suits their needs. It is your job to help them find the best fit while making the purchasing process as comfortable as possible.
 
Many producers feel it is necessary to discuss the intricate and sometimes confusing details of the Disability Insurance policy’s terms with their prospective clients before addressing the main requirements, causing them to lose the sale.

It is important to help prospects identify their most important criteria and simplify the purchasing process for them. Remind them to look at the big picture.

How can you help simplify this process?
Start by asking some of the following questions:
 
  • How much monthly income would you need to meet your financial obligations if you got sick or hurt and could not work?
  • Will you need to increase the policy’s monthly benefits in the future?
  • What is your budget for your Income Protection Plan?
  • Would you work in a different occupation if you were unable to do your occupation? Or would you wait to get well enough to get back to your job? (even Part-Time)
  • Do you have any medical conditions that might preclude you from purchasing Disability Insurance at this time?
Remember to listen carefully as it is your job to make the decision process simple and manageable for your clients.
 
If you would like to learn more about Disability Income or need prospecting tips contact your Disability Income Specialist today.
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Simplified Underwriting That Your DI Cases Need

The Simplified Underwriting Program makes it quick and easy for advisors to get Disability Income cases issued more effectively – fewer underwriting requirements will expedite your case.

No exam, no blood, no specimen, and no tax returns required.*

After the basic application has been submitted, your client simply completes a 15 minute telephone interview or completes the Online Health Questionnaire and the policy can be issued within 48 hours.
 
As one of the nation’s leading Disability Income Protection marketers, we now make available a total of $25,000 of monthly benefit for your Business Owner clients on a simplified underwriting basis.
 
The policy is non-cancellable, guaranteed renewable to age 65, and issued with a top-rated domestic insurance carrier.
 
Clients age 50 and under can now purchase $15,000 of monthly Business Overhead Expense (BOE) coverage and include an additional $10,000 of monthly individual protection for a total of $25,000 of monthly benefit. Multi-Life Issue to age 64. (3+ Lives)
 
The Opportunity
 
Reach out to your business owner clients who may have an existing group LTD plan in place, or even those who have no plan at all. Typically I’ve found, group LTD plans all have a maximum benefit payable (or CAP) that can be below 60% of the business owner’s salary and the benefits are taxable.
 
This additional simplified coverage can make up the gap left by their group plan – and the BOE coverage will reimburse the business owner for his company’s fixed expenses, while he or she recovers from the illness or injury, and keep the business running.
 
Please contact your Disability Insurance Sales Specialist for marketing support, or to discuss DI sales strategies that fit your business and can increase your bottom line in 2024.
 
*tax returns required for Self-Employed
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Generating Sales With A DI Benefit Review

Are you looking to increase your personal production and income? One straightforward way to generate additional sales with existing clients is to offer a Disability Income Benefit Review.

Many clients already have group Long-Term Disability (LTD) benefits in place, but are unaware of the potential gaps in coverage that Group Plans create.

Questions Advisors Should Never Over Look During A DI Benefit Review:
  • How long must the client wait before collecting Group LTD insurance benefits?
  • What percentage of pay (if any) will they receive during the waiting period?
  • If partial benefits are provided, do they have to be totally disabled during the waiting period?
  • What percentage of their pay will they receive from this benefit?
  • What is the maximum monthly benefit?
  • Is bonus income or incentive pay covered?
  • How long are benefits payable?
  • Will the plan pay benefits if they are working at a reduced capacity?
  • To what extent will their benefit be taxed?
  • To what extent will they be responsible for medical insurance premiums and other benefits previously provided by my employer?
  • Will the benefits be adjusted for cost of living increases?
  • Can they retain the coverage should they change employers?
With answers to these questions, we can show you how to address the existing gaps in your clients’ coverage, while generating increased earning potential for you.
 
Contact your DI Sales & Marketing Manager for tips on how to incorporate these questions into your existing client review process.
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Income Protection – The Time Is Now

When is the best time to buy an income protection plan? The answer is – right now. It should be done before any health challenges arise that preclude prospects from getting this valuable coverage, or the premium becomes too expensive due to older ages.

Start the conversation with young couples, ages 25 to 45 – they are the top prospects for income protection. They’re purchasing homes and starting families – it’s an ideal 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, as their lifestyle and long-term financial plans depend on it.
A 33-year-old taking in 60k annually will earn approx. 3.5 million by age 67 with a 3% annual increase. Many would agree that’s an asset worth protecting.
Remind clients how long it took to build their current savings and retirement funds – assets that can be swiftly impacted and depleted due to an illness or injury that prevents them from returning to work in a timely fashion.
 
While single, full-time wage earners, new home owners, and families just starting out are top prospects – don’t forget about your current life insurance holders, and auto policy owners with higher limits.
 
Talking Points:
  • Explain what’s at risk – a lifetime of earning potentially lost due to an illness or injury. (www.whatsmyeiq.org)
  • Lay out how Disability Income Insurance can help cover expenses during recovery.
  • The time to purchase this coverage is now – the premium will never be lower.
We have client approved marketing tools available to help you prospect your current customers while reaching new ones. Contact your Disability Expert to learn more about growing this corner of your business.

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