Shed the light on the importance of income protection

Transcription

1 May is Disability Insurance Awareness Month Shed the light on the importance of income protection Greg Mazzei, Disability Income Regional Vice President Tampa, Florida What you ll learn today Who is a likely prospect How do you sell it What if they object Our efforts for Disability Insurance Awareness Month 1

2 Who is a likely prospect? Almost everyone in the working population, but specifically those who: Are ages 30 to 50 (typically available to ages 18 to 60) Earning a minium income of $40,000/year Are interested in protecting their most important asset their ability to work and earn an income Have other risk and/or protection products with you Meet Principal Life s underwriting guidelines for occupation, income, net worth and medical history Why do they need income protection? More than 35% of workers with 401(k) or IRA plans have not thought about or don t know what would happen to their contributions if they were unable to earn an income for a period of time. 1 Most United States workers would face dire financial consequences if they were unable to work for an extended period of time due to a disabling illness or injury. In fact, nine out of ten workers underestimated their own chances of becoming disabled. 1 Just 36% of all full-time employees have access to long-term disability insurance through their employers, and fewer than 6 million individual disability policies are in force in the United States. 2 1 Council for Disability Awareness, 2007 Disability Awareness Survey 2 LIFE Foundation, March

3 Why do they need income protection? Because income is the financial foundation, without an income how would your clients be able to meet their financial obligations? Group Long-Term Disability Insurance Excellent foundation Guaranteed issue Employer provided Inexpensive Is it enough? Generally 60% of salary Benefits are typically taxable (when paid for by the employer) No bonus or pension benefits protected Not portable Generally conservative definitions 3

4 The sales process Have the proposal prepared before the meeting Sell the need Sell the benefits of the product Sell the affordable premium What is important to you? Sell the need How valuable is your income? How do you really spend your money? What are your typical monthly expenses? Could you afford to live without your income for a period of time 2 months, 6 months, to age 65? Are you concerned about inflation? Keep it simple and tie the conversation back to everyday experiences and what they know and understand. 4

5 Disabilities play no favorites The causes of disability may surprise you. Here s a typical breakdown (by percentage of claims) of some typical reasons an individual may become disabled. Source: Principal Life Disability Insurance claims incurred as of March The above is for illustration purposes only and is not intended as an inclusive representation of all claims. You probably think it won t happen to you, but During your career, you re 3½ times more likely to be injured and need disability coverage than you are to die and need life insurance. Source: Commissioner s Individual Disability Tables, CSO 5

6 It s not the money, it s the security and everything it provides The House Safe transportation Food Clothing Gas Insurance Taxes Retirement Vacations Gifts Sports leagues Entertainment Schooling Weddings Travel House maintenance Car repairs Which job would you prefer? * $100,000 less $1,500 in hypothetical annual disability income insurance premiums. Hypothetical premium amount paid and hypothetical annual benefit amount received depends on various factors. Your Financial Representative can illustrate the exact amount eligible for based on current underwriting guidelines. 6

7 Sell the product Keep it simple Have the proposal ready and work off the proposal Explain the waiting period and benefit period (and what that means to them) Policy pays in three ways Total Disability Partial Disability Catastrophic Disability Guaranteed benefits and premium Ability to add riders to customize policy to them inflation protection, ability to return to work part-time, etc. Sell the premium Premium typically costs 1% to 2% of gross income For a benefit that could pay out millions of dollars if you become too sick or hurt to work Get comfortable with asking them to commit If it was free would you buy it? Do you feel like this is something you can commit to? Do you want to move forward with the application? Is the premium jumping off the page at you? 7

8 $7,950/month benefit replaces 48% of $200,000 annual income For 1.51% of annual income Disability Insurance Awareness Month First annual, sponsored by the LIFE Foundation Local marketing tools available (co-op ad, press release template, consumer e- mailer, etc.) New testimonials! Know the Facts consumer level piece From Here to Security educational materials Corporate level advertising and press Visit Principal efinancialprofessional SM for more information! Go to: Individal Solutions Disability Insurance Sales & Marketing Disability Insurance Awareness Month 8

9 Questions? Insurance issued by Principal Life Insurance Company a member of the Principal Financial Group, Des Moines, IA Disability insurance has exclusions and limitations. For costs and complete details of the coverage, contact your Principal Life Financial Representative