LIFE UNDERWRITER TRAINING COUNCIL COURSE

Transcription

1 LIFE UNDERWRITER TRAINING COUNCIL COURSE DISABILITY INCOME LUTC 211 WORKBOOK W O R K B O O K THE LIFE UNDERWRITER TRAINING COUNCIL Established 1947 by American Life Convention Life Insurance Agency Management Association (now LIMRA) Life Insurance Association of America The National Association of Life Underwriters FORTY-SECOND EDITION THE LIFE UNDERWRITER TRAINING COUNCIL WISCONSIN AVE., BETHESDA, MD All Rights Reserved.

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3 Disability Income Course Assignment Schedule This student textbook (Volume 211) of the LUTC Personal Insurance Series, contains both text and workbook material for Classes 1 through 13 of the course, Disability Income. Class Assignments Page Page In In Text Workbook 1 Readings: Learning Objectives 1-1 The Need for Disability Income 1-3 Date Disability Income and the Total Insurance Needs Approach 1-5 Disability Income Prospects 1-9 But You Never Asked 1-13 Guidelines W-7 Performance of Action Projects By Nonsales Students and Managers W-12 Acknowledgement of Course Requirements W-13 2 Readings: Learning Objectives 2-1 Disability Income Coverage Past and Present 2-3 Date Ethics and Professional Business Practices In Disability Sales 2-13 Disability Income Sales and the Agent 2-21 Looking for Disability Income Prospects 2-27 Case History Missing the Point 2-35 Questionnaire Class 2 W-15 Sales Planning Project 1 To Be Rich W-17 3 Readings: Learning Objectives 3-1 Social Security and Other Government Coverages 3-3 Date Defining Disability 3-13 Replacement of Earnings 3-21 The Preapproach 3-27 Disability Income Salestrack 3-33 Case History Starting Early 3-47 Questionnaire Class 3 W-21 Sales Planning Project 2 Thinking It Through W-23 Workbook W-3

4 Class Assignments Page Page In In Text Workbook 4 Readings: Learning Objectives 4-1 How Much Coverage Is Available? 4-3 Date Analyzing Needs 4-7 How to Approach the Prospect Using Disability Income Coverage 4-15 The Art of Fact Finding 4-21 Case History Asking the Right Questions 4-31 Questionnaire Class 4 W-25 Action Project 1 Are You Covered? W-27 5 Readings: Learning Objectives 5-1 When Coverage Begins and Ends 5-3 Date Policy Definitions 5-9 What Is Not Covered? 5-15 Other Policy Provisions 5-19 Tax Implications of Personal Disability Income Insurance 5-27 Disability Income and Other Sales 5-29 Case History Average Doesn t Even Come Close 5-35 Questionnaire Class 5 W-31 Sales Planning Project 3 Analyzing Coverage W-33 6 Readings: Learning Objectives 6-1 When Is Coverage Renewable? 6-3 Date Disability Income Availability 6-7 Additional Policy Benefits and Riders 6-13 Modifying Coverage 6-21 Avoiding Overinsurance 6-27 Case History In It Together 6-31 The Hobart Case 6-35 Questionnaire Class 6 W-37 Action Project 2 Is It Enough? W-39 W-4 Disability Income

5 Class Assignments Page Page In In Text Workbook 7 Readings: Learning Objectives 7-1 Answering Objections 7-3 Date Motivation Turning Prospects Into Clients 7-15 Completing the Application 7-21 Protecting Yourself By Being Professional 7-27 Case History Computing a Sale 7-31 Case Study The Browns 7-35 Questionnaire Class 7 W-43 Action Project 3 What Happens Then? W-45 8 Readings: Learning Objectives 8-1 Field Underwriting 8-3 Date Home Office Underwriting 8-7 Policy Delivery and Service 8-17 Summary of the Individual Disability Income Product 8-23 Case History John Galli 8-29 Case History Working Past the Sale 8-31 Questionnaire Class 8 W-49 9 Readings: Learning Objectives 9-1 Sick Pay Plans 9-3 Date What Selling In the Business Disability Income Market Can Do for You 9-11 Group Disability Insurance 9-15 Tax Implications of Group Disability Insurance In the Business Market 9-25 Prospecting In the Business Market 9-33 The Approach and the Sale 9-37 Case History Uncle Sam As a Sales Aid 9-45 Questionnaire Class 9 W-51 Action Project 4 Tax Bonus W-53 Workbook W-5

6 Class Assignments Page Page In In Text Workbook 10 Readings: Learning Objectives 10-1 Executive Planning 10-3 Date Disability Split Dollar Plans Business Overhead Expense Insurance The Key Person Policy Service After the Sale Business Sales Summary Case History Taking Care of Business Questionnaire Class 10 W-59 Action Project 5 Looking for Overhead Business W Readings: Learning Objectives 11-1 The Disability Buyout 11-3 Date Designing Disability Buyout Coverage 11-7 The Disability Buyout Product and the Plan Document The Disability Buyout Sale Harper Consultants A Disability Buyout Case Problem Case History Living Death and Taxes Questionnaire Class 11 W-65 Sales Planning Project 4 Market Mobility Checklist W Readings: Learning Objectives 12-1 Worksite Marketing Payroll Deduction Sales 12-3 Date Long-Term Care 12-9 The Importance of Persistency Case History Service and the Sale Questionnaire Class 12 W-69 Sales Planning Project 5 Understanding Long-Term Care W Readings: Learning Objectives 13-1 Review all previous assignments Date Note: This is a closed-book exam. That is you cannot refer to your textbook or any notes during the exam. W-6 Disability Income

7 Guidelines LUTC is practical, on-the-job, sales training. As such, it requires that the student get into the act and participate fully. The workbook is intended to help you actively participate. In it are the schedule for the course, text assignments, questionnaires, sales planning projects and action projects. Supplementary material may be included for use as your moderator directs. What you derive from LUTC depends on you. If you take full responsibility for accomplishing all the objectives along the way and if you make a persistent effort to participate in the class sessions, you will improve your knowledge and skill. For some life underwriters, this experience has been the beginning of highly successful careers. What it is for you is your choice. Assignments Active class participation will be encouraged by your moderator at every session. To augment this discussion, you will be given outside assignments to insure that you will be ready to apply the principles you are studying. The timetable for these assignments can be found in the assignment schedule in the front of this workbook section. Assignment Schedule The assignment schedule lays out the entire course s work. By following it, you can readily determine the material that will be covered in every class, and the work that is expected of you. The dates of each session will be announced by your moderator. Insert these dates in the spaces provided on the schedule. Before Class Assignments must be completed before the class meets. Before attending each session you are expected to complete specific work. Read and study the pages of text assigned. Complete the written questionnaire. These questionnaires are found in this workbook. Complete the sales planning project assigned. Complete work on the action project and review it with your agency head or sales supervisor prior to turning it in to the moderator. Complete all other assignments indicated in the text or by your moderator. Workbook W-7

8 In Class When you attend the class session, you are expected to be prepared. Turn in assignments at the beginning of class. All assignments are scheduled well in advance to allow sufficient time for accomplishment of objectives. Your moderator has been directed to penalize late papers by 50 percent. If more than a week late, papers receive a zero. Participate in class discussions based on the assigned text material, questionnaires, projects, and your experience in selling insurance. Texts The purpose of LUTC is to develop sales skill and professionalism. Improved ability requires knowledge as well as practice. The text materials are designed to provide the knowledge that must form the foundation for better performance. Reading and studying the texts places all students at the same minimum level of understanding with basic concepts and knowledge. The texts are the product of efforts by many individuals agents, field managers, trainers, home office specialists, company officers, authorities in the industry, as well as members of the Content and Techniques Committees. These committees are comprised of a balance of field and home office specialists who annually advise and assist the LUTC staff in its research and editing of the text materials. Finally, it should be noted that many suggestions ultimately incorporated into the programs originally came from students themselves. The written questionnaire for each class is based on the assigned text reading. It is intended as a means of highlighting some of the more important areas of the study material and as a test of your grasp of the material before you attempt to use it where it counts in front of a prospect. Some of the text material will be new to you; some of it will be a refresher of knowledge learned in the past. In either case, you will find it valuable and necessary as preparation for the class discussions and the examination. The benefits you gain will be in direct proportion to the effort you expend. Every student will be expected to spend no less time in preparation for class discussion than the time allowed for discussions two and one-half hours. To do less would be to deprive yourself of a unique opportunity to learn more about selling. It would also deprive your fellow students of the very important advantage of learning from you. Cases The LUTC program presents two types of case material for your study. You may consider both case histories and case studies. Case History The purpose of a case history is to stimulate thinking about sales ideas and activities. Each case is the story of an actual sales situation. The approach used by the agent may or may not be good in your estimation. The key point is to determine what you can learn from the example. How would you handle a similar situation? Does the case suggest methods in the sale process that you want to adopt or avoid? W-8 Disability Income

9 Incidentally, many case histories are submitted by LUTC students. If you have a case that you feel might serve a good purpose in future editions of the text, advise your moderator. He or she will help you prepare a description of the case and submit it to LUTC headquarters for review. Case Study A case study provides you with an opportunity to actively participate and practice some of the skills you are discussing and learning. You will be given a specific set of facts and circumstances about a sales situation. Then it will be your assignment to consider the situation and come up with specific recommendations as well as provide and support your rationale for arriving at the conclusions. The benefit of this activity is the sharing of the conclusions of many students. It is interesting and helpful to learn several different approaches to the same set of facts. Examinations A final examination is included in all courses. You must pass the final examination in order to pass the course. Passing is 70 percent. All fifty exam questions are in the multiple-choice format. Sales Planning Projects Each sales planning project relates to the work of a life underwriter when not actually selling. The projects are arranged to give you a comprehensive and integrated picture of various aspects of your sales methods, to highlight areas in which you may need strengthening, to increase your efficiency in prospecting, interview planning, and service. It has been said that there is no such thing as a born salesperson. Some may doubt the validity of this observation in its full meaning, but few would deny that the majority of top agents are successful because of their training the habits they acquired in learning their profession. Selling is not a mysterious power to hypnotize people. It is a scientific process that includes all the organized forces of logic and emotion that a sales professional can develop. Every step of a sale must be carefully planned and every phase of an agent s total sales activities must also be carefully planned. Your presence in this LUTC class testifies to your recognition of these basic principles. A person does not become a life underwriter simply by signing a contract with an insurance company any more than a person could become a professional athlete simply by signing a contract. It takes organized efforts to reach the heights. No phase of selling can be neglected if the agent wants to become a true leader. This means careful, methodical learning of the skills required, including prospecting, keeping records, analyzing success and failure, adapting the company s products to the customer s situation, needs, and wants. Note that these are, for the most part, demands made of the sales representative before and after facing a prospect. They are requirements in addition to actual selling. These are the things that must be done efficiently and habitually to achieve success. The sales planning projects are designed to emphasize this point. Forms are provided for your use in developing each project. You will be Workbook W-9

10 allowed one week or more to carry out each assignment. You are expected to take this opportunity to derive maximum benefit from the projects. Work on a project should begin the day it is assigned. If the beginning is postponed until the last possible moment, you will find that you have missed the real purpose and have lost the real benefit. Any one of the sales planning projects could generate the extra spark that helps you increase your production substantially. Action Projects Knowledge misdirected is a waste of intelligence; skill unpracticed is a waste of talent. No part of an LUTC course is more important than an action project. Action projects require you to take your newly sharpened skill to the market place for immediate use. You will find that each action project is a practical and profitable means of immediately applying the ideas you gained today. And you will find that immediate use of your new skill in front of a prospect will make that skill yours for the rest of your career. The action projects are a series of field-tested sales missions which are simple in design, yet developed around ideas, markets, or approaches which might otherwise be neglected. They will readily fit into any agent s normal operations. Special preparation is not necessary. No extra research or study is involved. Nor are these assignments intended to replace any of your regular work habits. On the contrary, an action project s greatest value will be realized only if you treat it as an additional effort in your week s regular activities. Sales are almost inevitable, but they are not required for completion of the action project. Only action is required. In every action project there will be a specific brief assignment that calls for a personal contract with a number of prospects for a definite purpose. The purpose will be clearly defined. An approach will be suggested. As you prepare for each project consider any appropriate sales material available from your company or agency. Consult with your manager or supervisor to obtain guidance for completing the projects. The action projects are the real test of the value of this course. Approached with the proper attitude they will be profitable for you. Cooperation Your moderator is an outstanding individual nominated by the life underwriters association and appointed by LUTC headquarters. He or she is not a teacher by profession, but a full-time career representative in sales or management. Your moderator shares with you the demands of self-discipline and constant pressure of time. Consequently, the moderator cannot afford the luxury of catering to anyone who is negligent about the rules of LUTC or the class with respect to completing work on time, maintaining reasonable order, and respecting the rights of others. The moderator needs and deserves the full cooperation of every student. If at times this means that one or two individuals must sacrifice their personal W-10 Disability Income

11 preferences for the good of the group, they should be prepared to do so. The loss of their preferences will mean nothing a few months from now. The resultant benefit to all members of the group can be significant for years into the future. Conclusion Training experts generally agree that an effective system of training must include adequate coverage of the material to be learned, immediate application, recognition of results, and repetition. On the first three points, the format of the course you are about to begin has qualified for many years. Principles and techniques are an essential part of every class session; application is direct and immediate; results are clearly perceived in daily field work, in the questionnaires, and examinations, and in the weekly discussions. The fourth point, repetition, is far more extensive in its reach. Each principle or technique must be put into practice often enough and for a long enough period to make it a habitual part of your regular sales activities. This aspect of the training program is the exclusive responsibility of only one person you. To the degree that you try to use all you have learned, the benefits of LUTC will be yours for the rest of your life. Passing Requirements Attendance Your participation in the classroom discussion is crucial to the effectiveness of the LUTC program. Therefore, your attendance is also vital. To successfully complete the course, you must attend at least 9 of the 12 regular classes. For 8 week courses, you must attend at least 6 of the 8 regular classes. It means no more than 3 absences for thirteen week courses and no more than 2 absences for 8 week courses. Lateness of more than 20 minutes is half an absence. So is early leaving. Missing more than 40 minutes is a full absence. If you end the year with absences, you have exceeded the allowable limit of 3. If you are in an 8-week course and end the year with absences, you have exceeded the allowable limit of 2. Moderator s Grade Your moderator will record your grades for written questionnaires, projects, and participation in class sessions. These grades will be combined to obtain the average grade for all classroom related work, the Moderator s Grade. Examination Grade There will be a 50-question final examination at the end of the course. The questions will be multiple choice. A grade of 70 percent or higher is necessary to pass the exam. Term Grade The average of the Moderator s Grade and the final examination score must be no less than 70 percent to obtain credit. This average is called the Term Grade. Three Requirements In summary, to qualify for successful completion of the course, you must meet each of the following three requirements: 1. Meet the attendance requirement for your course. 2. Score 70 percent or more on the final examination, and 3. Receive a Term Grade of at least 70 percent. Workbook W-11

12 Performance of Action Projects by Nonsales Students & Managers All students are expected to do the Action Projects in the Disability Income Course. This applies to students who are nonproducers and to those in management. It includes, for example, students such as office secretaries, home office executives, state insurance commissioners, finance officer on a military base, and others who may not be licensed to sell life insurance. If you cannot do the projects yourself, as they are shown, you are expected to handle the projects in one of the following ways. (They are listed in order of LUTC s preference.) 1. Select a local Disability Income Course student with your company, in your community, to work with in doing this project. Base your reports on this joint work. 2. If there is no local LUTC student from your company to work with, do joint work with one of your company s agents who is not in LUTC. This could be a former LUTC student, or someone without any LUTC experience. 3. If you are in management, and if it is not possible to work with an agent/student, assign the projects to one or more of the agents under your supervision, and report these results. 4. If you have no agents to work with, and no agents under your supervision, arrange to interview one or more agents each week, and use the interview as the basis of the project report. That is, on the project reporting form, relate what the agent did, and details of what transpired. 5. If the four preceding options are unworkable for you, it is up to you to suggest alternate solutions that you and your moderator agree on. For example, you may develop a presentation to write out or give orally to the LUTC class when an Action Project is due. This may be on a specialty topic of yours. Or, another example, you may research a particular insurance topic, or sales topic, and write it out, giving photocopies to all class members. Topics can include, for example, state laws, statistical information about insurance, actuarial studies, articles in insurance magazines, self-improvement topics, relationship insights, even a question about something that came up in calss and needs reserach for a clearer understanding. Keep in mind, these five alternatives are special options for isolated instances. Almost every student in a LUTC class is licensed to sell insurance and is expected to complete the Action Projects as assigned for a passing grade. That is, you are expected to do the prospecting activity and make the follow-up approaches yourself. If you need to do the projects in one of the ways shown above, discuss it in advance with your moderator. That is, let your moderator know about your situation. Talk over the alternatives with him or her. Get agreement on how to proceed. To safeguard yourself, put your agreement in writing, include both of your signatures and file. W-12 Disability Income

13 Note to LUTC Students Please read this page carefully, sign at the bottom, and return the bottom portion to your moderators after having your supervisor sign the other side. Occasionally there are misunderstandings concerning the requirements for successful completion of the course. The purpose of this memorandum is to insure that the basic requirements of LUTC and the ground rules laid down by the moderator are clearly understood. Failure to sign this form does not relieve you from these provisions. Acknowlegement of Course Requirements To be signed by student It is my understanding, from the explanation received in the first class session and outlined in the Guidelines section of the workbook, that successful completion of this LUTC course requires 80% attendance, a passing examination score (70%), and an overall average (term grade) of 70% on all work for the year. Specifically, I understand that: 1. Credit for the course will not be given to any student who fails to attend at least ten (10) class sessions, including the final exam. The maximum number of absences is three (3). Missing more than 20 minutes of class is a half-absence. Missing more than 40 minutes of class is a full absence. It does not matter whether absences are due to illness, injury, business appointments, company or agency meetings, vacations or conflicts in personal schedules. No attendance credit is given for attendance at an exam review session. I further understand that neither the LUTC chair or moderators has authority to excuse absences, since the requirement applies impartially to all LUTC students. 2. Grades are assigned during the course by the moderator. Grades for participation in class discussions (and preparation for them), and scores made on Action Projects, Sales Planning Projects and Questionnaires are averaged. That number is then averaged with the final examination to arrive at the Term Grade. 3. Written assignments are due at the beginning of the session in which they are due. Late papers are automatically reduced by 50% up to one week late and to zero after that. 4. To receive credit for the course, I must sit for and receive a passing grade on a final examination acceptable to LUTC. The nationally scheduled exam date cannot be changed. LUTC reserves the right to set aside the final examination of any class and require another examination. 5. Course results will be amiled out within four weeks after the final exam date, assuming all course requirements have been met, including payment of tuition. These reports will indicate a passing or not passing status only. No numerical grade is assigned. Return the bottom portion of this form to the moderator after your agency supervisor has signed the reverse side. I have read the course requirements and understand them. I further understand that recruiting or attempted recruiting of personnel of another company is not permitted in the LUTC program or in connection therewith. Finally, I understand that any student whose behavior adversely affects reasonable order and harmony in the LUTC class is subject to disenrollment without tuition refund, and may be barred from future participation in LUTC Courses. From: Print your name Date Student s Signature Workbook W-13

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15 Name Date Questionnaire Class 2 (Due Class 2) (10 points each.) 1. Disability income insurance: (1) was developed before the development of life insurance. (2) was developed before the development of property and casualty insurance. (3) was developed after both life and property and casualty insurance. (4) first appeared during the Great Depression. 2. The definition of disability : (1) is standard in all products. (2) can differ greatly. (3) changes according to each disability. (4) is changed every three years by a Disability Board of Examiners. 3. Disability income coverage and medical coverage: (1) are often both needed in times of illness or injury. (2) should never be sold to the same person since duplication of benefits would occur. (3) are different names for the same coverage. (4) both provide income replacement if the insured is ill or injured. 4. Which of the following statements is correct regarding guaranteed renewable policies? (1) The premium cannot be changed. (2) Premiums may be changed unilaterally on an individual contract. (3) Coverage is guaranteed as long as premiums are paid. (4) Coverage is guaranteed renewable as long as the insured meets the employment and income criteria. 5. Disability income coverage: (1) is an excellent wrap-up presentation in a total-needs approach. (2) can be closely related to the need for life insurance. (3) can be closely related to the need for property and casualty insurance. (4) all of the above. Workbook W-15

16 6. In providing disability income coverage, an agent should: (1) offer it only to professional people. (2) offer it only to prospects who are healthy. (3) offer it to all prospects who have a need for it. (4) offer it only to life clients, since they are the only people likely to have a need for it. 7. Which market would probably need disability income insurance? (1) single wage earners. (2) single heads of households. (3) dual income households. (4) all of the above. 8. Licenses to sell disability income insurance are issued by: (1) Department of Health and Welfare. (2) National Association of Securities Dealers. (3) State governments. (4) National Health Insurance Association (NHIA). 9. An agent s legal and ethical responsibility is to: (1) get the coverage needed issued for his or her client. (2) help the prospect present medical information in the most favorable light. (3) draw out as much detail as possible and present it fully. (4) keep information received from a prospect in confidence from the home office. 10. The voluntary organization of insurance companies created to promote ethical business practices is the: (1) NAIC. (2) IMSA. (3) LUTC. (4) NALU. W-16 Disability Income

17 Sales Planning Project 1 To Be Rich Assigned Class 1 Due Class 2 This project requires you to prepare a disability income sales approach for presentation in class. You may use the one suggested here, one provided by your company, or one you develop yourself. Beginning with Class 2, and during the remaining sessions, be prepared to present your sales approach in class exactly as you would to a prospect. It should take no longer than ten minutes to present. An effective sales presentation contains a series of good sales ideas that lead the prospect to a positive decision. When you tell the same sales story again and again, day after day, it becomes a part of you and a natural route to follow to success. Are You Rich? (Prospect), would you say you are rich? Except for rich people, most of us have a financial picture that looks like this: (At this point draw two horizontal lines not too far apart. Label the top line income and the lower line expenses. See reverse side for illustration.) Most of us manage to keep a little of what we earn after expenses are paid. The difference between income and expenses savings may not be much. But as long as the income line is above the expense line, we ll be all right. Do we agree so far? Now, suppose something comes along to twist the directions of these lines. The something that will surely do it is disability. Then the income line heads south and the expense line goes up, like this: (Draw income line down toward bottom of page, expense line up.) Savings are eaten up in a hurry not just by medical bills, although they usually exceed any insurance coverage you have, but by routine living costs. The difference between income and expenses now is not savings, but DEBT. What do you do? There is a limit to what people will lend someone totally disabled and out of work. Relatives and friends would help, but they have their own problems and wouldn t they rightfully expect you to use up your own resources before they begin contributing theirs? You could possibly sell your car or even your home, but I m sure you wouldn t want that and there is a better way to solve the problem. In a manner of speaking, the better way is to be rich enough not rich in the usual sense, but in the sense of having an extra source of money that can be called on when earnings stop...a source of money to take care of the disability problem. Let me show you how easily it can be arranged... Note: Please see Caution on page ii. Workbook W-17

18 INCOME EXPENSES DISABILITY D E B T OR INCOME INSURANCE S A V I N G S

19 Name Date Sales Planning Project 1 To Be Rich Assigned Class 1 Due Class 2 CERTIFICATION STATEMENT I have prepared a disability income sales approach for presentation in class. When called on in class by the moderator, I will do the best I can in demonstrating my proficiency. SIGNED (Student) Workbook W-19

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21 Name Date Questionnaire Class 3 (10 points each.) (Due Class 3) 1. The Social Security definition of disability is: (1) modified in each individual case. (2) currently interpreted very liberally. (3) quite strict, so benefits are difficult to get. (4) fairly liberal, so many people will receive benefits. 2. Workers compensation benefits: (1) vary widely by state. (2) cover all disabilities. (3) cover work-related accidents only. (4) are available only in a few states. 3. The definition of disability is: (1) very subjective. (2) the same in every policy. (3) relatively unimportant in determining coverage in case of a claim. (4) usually determined by the courts after disability occurs. 4. A residual disability benefit: (1) pays for presumptive disability. (2) encourages the insured to return to work. (3) forces the insured to remain at home until fully recovered. (4) is payable only for a limited time. 5. Under the residual benefit provision, benefits are: (1) based on 50% of the insured s base earnings. (2) proportional and based on a percentage of lost income. (3) unavailable if the insured is working part-time. (4) payable for the 30-day period after the insured s return to work. 6. For what length of time are benefits payable under a presumptive disability clause? (1) for the length of the benefit period in the basic policy (2) only if the insured is under a doctor s care (3) until the insured returns to work in any occupation (4) until the insured returns to work in his or her regular occupation Workbook W-21

22 7. Using savings to replace income lost from disability: (1) makes most expenses during disability tax deductible. (2) can make it difficult to meet other financial goals. (3) is the best solution for a period of disability under a year. (4) is the only option for self-employed people. 8. The amount of Social Security disability benefits an eligible individual will receive is: (1) based on his or her Primary Insurance Amount (PIA). (2) 50% of his or her AIME. (3) based on the maximum limit of $61,200. (4) 75% of his or her gross income. 9. To qualify for Social Security disability benefits, a person must: (1) be over age 65. (2) complete the 12-month waiting period. (3) be fully insured under Social Security. (4) have 15 consecutive years of covered work experience. 10. The Social Security offset provision that pays the difference between the insured amount and the amount received from Social Security benefits is known as the: (1) all or nothing provision. (2) all, part or nothing provision. (3) direct offset provision. (4) income loss provision. W-22 Disability Income

23 Name Date Sales Planning Project 2 Thinking It Through Assigned Class 2 Due Class 3 Disability income coverage is one of the products you can offer your prospects and clients. However, you may have concentrated on life insurance, with disability income insurance taking a secondary role or no role at all. This project focuses attention on your attitude, knowledge, and sales efforts in the area of disability income coverage. It will help you define your thoughts about disability income insurance, identify the activity you ve had in selling the product, and formulate plans for future activity in the disability income area. In completing the following questions, be totally honest with yourself. There are no right or wrong answers. This exercise is not planned to justify your outlook but to examine it. Consider each point carefully, and respond honestly. A serious effort to analyze your own sales record, attitude, and plans at this point will help you make the most of participation in this course. 1. (a) List the products you can offer your clients and prospects. (Consider life, health, disability income, property and casualty, etc.) (b) Which product is your lead line and why? 2. (a) How many years and months have you been licensed to sell health insurance products? (b) What kind of health insurance do you sell the most, and why? Workbook W-23

24 3. Using a recent month as a basis (choose an example that seems typical to you), to what percentage of prospects did you offer disability income coverage? (a) by itself? (b) as part of another sales presentation? 4. (a) Some of the people you talked with about other products were probably disability income prospects, too. Did you approach them about disability income coverage? If so, what were the results? (b) If you did not approach these prospects, why not? 5. What production goals have you set for life insurance this year? What goal have you set for disability income coverage? 6. What commission rate do you receive for a term life insurance policy? What for whole life? What for universal life? What rate do you receive for disability income protection? W-24 Disability Income