Your Personal Disability Income Protection Plan

Transcription

1 Your Personal Disability Income Protection Plan Prepared for: Kimberly Garrison September 25, 2015 Presented by: Joe Capone, ChFC, LUTCF Insuring Income 160 Gould Street Suite 310 Needham, MA Protector Essential SM Individual Disability Income Insurance Illustration Standard Insurance Company 1100 SW Sixth Avenue Portland, OR A subsidiary of StanCorp Financial Group, Inc.

2 Protect Your Most Valuable Asset Your Income You probably already insure valued assets like your home and your car. Protector Essential Individual Disability Income (IDI) insurance is designed to help you offset the loss of income following a disabling accident or illness. Taking this step now could mean the difference between a secure future for you and your family and a devastating financial burden. This illustration shows how The Standard s Protector Essential provides comprehensive coverage to meet your needs, from inflation protection to extended benefits. What Are The Odds Of A Disability Happening To You? Just over 1 in 4 of today's 20 year-olds will become disabled before reaching age How Long Does The Average Disability Last? This chart shows the average duration of disabilities lasting more than 90 days. Duration of disability is measured from the start of disability to (at most) age 65. Average duration for insured individuals of a disability lasting more than 90 days and ending before age 65, based on the individual s age when disability begins. Individual Disability Experience Committee of the Society of Actuaries, Count On The Standard The Standard ranks among the leading IDI insurance carriers in the nation. 2 You can be confident that we re financially strong, our disability products are high in quality and we can pay what we promise now and in the future. Our goal is to give you the kind of expert, friendly service we wish for ourselves and our families. For more than 100 years, we ve lived up to that promise. 1 Social Security Administration, Fact Sheet June Based on active policies. Gen Re 2012 Individual DI Market Survey The Standard is a marketing name for StanCorp Financial Group, Inc. and subsidiaries. Insurance products are offered by Standard Insurance Company of Portland, Oregon in all states except New York. Standard Insurance Company is licensed to solicit insurance business in all states except New York (10/10) Policy Form B152FL Page 2 of 10

3 Protect Your Earning Power With Protector Essential Your Lifetime Earnings And Maximum Potential Benefit Your Current Age: 45 Your Current Annual Income: $72,000 Your Earning Potential To Age 67: $1,584,000 (does not include raises) Your Maximum Potential Benefit With Protector Essential $926,550 Comparing your potential long-term earnings and benefits helps show how valuable income protection can be. While unlikely, if you became totally disabled immediately after the policy became in force, and you remained totally disabled until the end of the Maximum Benefit Period, $926,550 is the total potential base policy benefit you would receive (based on a $3,550 monthly benefit). This does not include any amount that may be payable under any rider. How Much Income Can You Replace With Protector Essential? Your Income: $72,000 Current Income Protection Income Protection With Protector Essential 59% Current Income Replacement: 0% Potential Income Replacement: 59% Legend Individually-Paid Protector Essential: Based on quoted coverage and gross income and assumes non-taxable benefits. Not Covered (10/10) Policy Form B152FL Page 3 of 10

4 Your Personal Disability Income Protection Plan Insured: Kimberly Garrison Total Monthly Benefit: $3,550 Premiums Payable To: Age 67 Sex/Age: Female/45 Waiting Period: 90 Days Risk Class: Non Tobacco Occupation Class: A Maximum Benefit Period: To Age 67 # Coverage Overview Monthly Benefit Description Annual Premium $3,550 Base Policy Benefit* $3, Policy Fee $40.00 Base Coverage Features Benefit for Presumptive Disability Included Residual Disability Included Included Survivor Benefit Included Unlimited Mental Disorder Included and/or Substance Abuse Benefit Optional Riders Selected Indexed Cost of Living Rider* $ % maximum increase Total Annual Premium $3, Total Annual Benefit Semi-Annual Premium Quarterly Premium Monthly Premium $42,600 $1, $1, $ See the next page for additional premium modes available. Office Use Only: PE 6713; E RES 13; E COL3 13; Version , Update 363 * Premiums for these benefits may change as other benefits are added or deleted. # Determined by age when disability begins (10/10) Policy Form B152FL Page 4 of 10

5 Choose The Options That Work Best For You Annual Premiums For Alternative Benefit And Waiting Periods Benefit Period Waiting Period 60 Days 90 Days 180 Days 365 Days 730 Days 2 Years N/A N/A N/A N/A N/A 5 Years $2, $2, $1, $1, N/A To Age 67 $4, $3, $3, $2, $2, Your Payment Options The net annual premium as illustrated: $3, The chart below displays the cost of premiums if paid other than annually, and the difference in cost to you each year. Premium Mode And Number of Annual Premium Premium Total Annualized Cost Difference Payments Per Year Multiplier by Mode 4 Premium 5 Per Year 6 Special Monthly (12) $ $4, $ Quarterly (4) $1, $4, $ Semi-Annually (2) $1, $3, $ The Premium by Mode is the Net Annual Premium times the applicable Annual Premium Multiplier. 5 The Total Annualized Premium is the Modal Premium times the Number of Payments Per Year for that mode. 6 The Cost Difference Per Year is the total difference over a year between the Net Annual Premium and the Total Annualized Premium for the particular Premium Mode (10/10) Policy Form B152FL Page 5 of 10

6 Protector Essential Base Policy Features Benefit For Total Disability $3,550 After the waiting period and during your total disability, we will pay the total disability benefit for up to the maximum benefit period, subject to policy terms and limitations. The waiting period is the number of days of disability required before you are eligible for benefits. You are totally disabled if, because of your injury or sickness: 1. For the first 12 months of disability, you are unable to perform the substantial and material duties of your regular occupation; after the first 12 months of disability, you are unable to perform the substantial and material duties of your regular occupation and you are not engaged in the substantial and material duties of any occupation for which you are or become qualified by reason of education, training, or experience; and 2. You are under the regular care of a physician appropriate for your injury or sickness. This physician's care requirement will be waived when we receive written proof, satisfactory to us, that further care would be of no benefit to you. Your regular occupation is your occupation at the time your disability begins. If you have limited your practice to a professionally recognized specialty in medicine or law, the specialty will be deemed to be your regular occupation. Presumptive Total Disability If you permanently lose your hearing, speech, sight or the use of two limbs, we will pay the total disability benefit, beginning with the day of the loss, but not beyond the maximum benefit period. Residual Disability Benefit Rider The residual disability benefit pays a benefit if you are not totally disabled, but you are disabled enough to incur at least a 20% loss of income and if, because of injury or sickness: 1. You are able to perform some, but not all, of your regular occupation s substantial and material duties, or you are able to perform all of these duties but not for as long a time or as effectively as before; and 2. You are under the care of a physician. The monthly benefit amount for a residual disability is equal to the basic monthly benefit that would have been payable if you were totally disabled and this rider is part of the policy, times the loss of income for that month divided by Indexed Prior Monthly Earnings. At least a 20% loss of income is required. Benefits begin on the later of the commencement date or the day after your total disability ends. The minimum benefit payment for the first six months under this rider is 50% of the policy s basic monthly benefit. A benefit for total disability does not have to be paid before the residual disability benefit is payable. If you are unable to earn at least 20% of your Indexed Prior Monthly Earnings, we will pay the full basic monthly benefit. The rider also pays a recovery benefit if the insured returns to work at least 30 hours per week after a period of disability for which residual disability benefits were paid. The benefit will be payable in a lump sum and will equal the lesser of: 1) six times the basic monthly benefit; 2) the total residual disability benefit paid prior to recovery; or 3) the number of months remaining in the maximum benefit period times the basic monthly benefit. Continuous Disability Recurrent periods of disability from the same cause or causes are considered one period of continuous disability if separated by your recovery of less than 12 full months. No benefits are due or payable during any period of recovery (10/10) Policy Form B152FL Page 6 of 10

7 Rehabilitation Benefit If you join a vocational rehabilitation program, approved by The Standard, while you are receiving disability benefits, we will pay the difference, if any, between the benefit you would be eligible for if you were totally disabled, and the disability benefit for which you are eligible. This benefit will be paid for the lesser of 36 months or the number of months left in the maximum benefit period. We will also pay any reasonable costs for the program not paid by other plans, policies or programs. Premium Waiver Benefit While you are disabled and after the earlier of the date benefits start or the 90th day of continuous disability, we will waive premiums due under the policy. We will continue to waive future premiums while disability benefits are payable. After completion of the waiting period, we will refund any premium due and paid after the date your disability started. Survivor Benefit If you die while receiving total disability benefits, we will continue these benefits, payable to the owner or owner's estate, for up to three months, but not beyond any remaining maximum benefit period. Cosmetic and Transplant Surgery Benefit We will consider you as disabled if, more than six months after the policy is effective, you become disabled due to cosmetic or transplant surgery (10/10) Policy Form B152FL Page 7 of 10

8 POLICY RENEWABILITY AND PREMIUMS Guaranteed Renewable Your coverage is guaranteed renewable to the termination date as long as the premium is paid on time. The policy ends at that time unless you ask that it be continued under the Renewal Option (see below). We cannot change any feature of your policy, except for the premium, until the termination date. The premium may be changed only if the change applies to all policies with similar benefits insuring the same risk class. Renewal Option Renewable for Life: You may ask to continue the policy beyond the termination date under the Renewal Option if you are working at least 30 hours per week and are not disabled at the time of your request. Only the total disability benefit will be available. The benefit period is limited after age 67 and the premium may change. The policy will end after one period of disability under this option. Waiting Period 90 Days The waiting period is that period, measured from the first day of your disability, throughout which you must be disabled before disability benefits become payable. If you remain continuously disabled, you are eligible for disability benefits after the waiting period ends. Regardless of the number or length of any periods of recovery during your disability, for a benefit to be payable, the waiting period must be satisfied within the total number of consecutive days which equals two times the waiting period if 180 days or less, or one and a half times the waiting period if longer than 180 days. Maximum Benefit Period To Age 67 The maximum benefit period is the longest continuous period of time we will pay disability benefits during each continuous disability. For any maximum benefit period we will not pay benefits beyond the later of the policy termination date or the date on which 24 months of benefits have been paid for any continuous disability. If the Renewal Option is selected and benefits begin after age 64 (or 65 if appropriate) but before age 75, we will not pay for more than two years. For benefits starting after age 75, we will not pay benefits for more than 12 months (10/10) Policy Form B152FL Page 8 of 10

9 Exclusions And Limitations Exclusions From Coverage We will not pay benefits for the first 90 days of your disability due to pregnancy or childbirth, unless your disability is due to complications of pregnancy, and we will not pay benefits for disability due to war. We also will not pay benefits for disability caused or contributed to by your committing an assault or felony or participating in a riot, for disability while confined to a penal institution, or for disability caused by intentionally self-inflicted injury. After two years from the later of the policy's effective date or last reinstatement date, no misstatements in the application will be used to rescind the policy or deny a claim for disability starting after the end of the two-year period (this may be three years in some states). However, we will not pay benefits for any disability if fraud is involved or if the condition is specifically excluded (10/10) Policy Form B152FL Page 9 of 10

10 Optional Benefit Riders Indexed Cost of Living Benefit Rider The Indexed Cost of Living Benefit rider increases Disability income payments by an indexed percentage amount at each anniversary of continuous Total or Residual Disability for which a benefit is payable. The monthly benefit amount is a percentage of the base amount for Total or Residual disability. The percentage applied is based on the average annual change in the Consumer Price Index for All Urban Consumers (CPI-U) subject to a cap of either 3% or 6%, whichever is selected on the application. The maximum adjustment in any year is 3% or 6%. The benefit will not decrease even if the CPI-U decreases. The owner also has the option, on recovery from disability, of purchasing the benefit increases provided by the rider during disability (10/10) Policy Form B152FL Page 10 of 10

11 Underwriting Requirements (for Agent use only) Additional information regarding occupation classes, issue limits and underwriting requirements can be found in the Individual Disability Insurance Manual. For the proposed policy we require: Complete Application HIV/AIDS Test Authorization if required by state Income Documentation (W-2, Complete Tax Return, Pay Stub) Mini-exam Blood Profile Home Office Specimen (HOS) If other coverage is in force with The Standard, there may be additional requirements. For those employed in the health care profession, including those performing invasive procedures or who draw or handle blood, a blood profile and urinalysis are required for any amount. The Standard requires that you use a paramedical facility approved by The Those organizations are listed in the Individual Disability Insurance Manual. Please indicate that the results are to be sent to The Standard in Portland, Oregon (10/10) Policy Form B152FL

12 Understanding Income Documentation Income documentation is required for all disability income insurance applications (except for Simplified Underwriting, and select Students and New Professionals). The documentation required depends on the applicant s business entity, as shown in the table below. Documentation 1 for Protector Platinum SM, Protector Business Business Employer- Entity Essential, and Protector+ Protector Equity Protector What Income Figure to Use Paid Limits Students, Not Required unless requested by the underwriter For new in private Not available See Student/New Professional Guidelines in the Not eligible for Residents, New practice Special Occupations Section for benefit limits employer - paid Professionals Professionals, limits. please contact your underwriter. Non-owner Complete Form 1040 for most recent year including all Not available Not available W-2 box #5 labeled Medicare Wages and Tips OR May apply for employee schedules, W-2s of the proposed insured OR If income Project year-to-date salary to determine annual employer-paid is from salary only, provide copy of paystub showing a income. Do not project commissions or bonuses. 2 limits. 3 Independent minimum of six months of YTD income OR If 1099 OR 1099 s report income from independent contractors are not income, complete 1040 to include related Schedule C contractors. Most likely filed under a Schedule C, eligible for employerbut may be reported as other income paid limits. Owner of Sole Complete Form 1040 and Schedule C Schedule C from Not available Schedule C line #31 Not eligible for Proprietorship personal tax return employer - paid limits. C Corporation Complete W-2s of the proposed insured. Business Tax Business tax form 2 years complete W-2 box #5 labeled Medicare Wages and Tips May apply for Owner Form 1120 is required if 50%+ owner (non-medical 1120 business tax employer - paid occupations only) returns limits. 3 S Corporation Complete 1040, W-2s, and Schedule E OR Corporate Business tax form 2 years complete W-2 box #5 plus Schedule E Nonpassive income, May apply for Owner Tax Return Form 1120S and Schedule K-1 (1120S) 1120S business tax subtract Nonpassive loss, Section 179 Expense. 4 employer-paid limits returns Passive may be counted as unearned income. OR if the proposed Add 1120S line 7 (owner s share shown on W-2) and K-1 box number 1, subtract line 11 insured owns 2% or less of the business. 3 Partnership Complete 1040, Partnership Form 1065, Schedule K-1 Business tax form 2 years complete Add K-1 lines 1 and 4, subtract line 12 Not eligible for (1065) 1065 business tax employer-paid limits. returns LLC or LLP The type of business tax return filed for the LLC or LLP See appropriate 2 years complete Refer to the appropriate requirements above for See appropriate will govern the documentation required. business entity business tax regular corporations and partnerships. business entity above returns above The Standard reserves the right to require additional financial information on any applications regardless of amount, if necessary to reach an underwriting decision or to secure reinsurance. The Standard also reserves the right to limit or modify the amount of insurance coverage offered regardless of earned income, other financial information or other insurance in force. Two years of tax returns are required for business owners applying for the Business Owner Upgrade. 1 For some occupations, the occupation rating schedule in The Standard s Individual Disability Insurance Manual requires documentation of more than one year s earned income to qualify for an occupation classification. Examples include stockbrokers, real estate agents and insurance producers. 2 For bonus or commission to be considered as income, at least two years documentation is required. 3 To be eligible for employer-paid limits, the premium cannot be included in taxable income and the employee may not reimburse the employer for the premium. 4 Up to 20 percent of Section 179 depreciation can be added to the income to allow for an additional benefit of up to $1,000 a month. The Standard is a marketing name for StanCorp Financial Group, Inc. and subsidiaries. Insurance products are offered by Standard Insurance Company of Portland, Oregon in all states except New York. Standard Insurance Company is licensed to solicit insurance business in all states except New York (10/10) Policy Form B152FL