Getting Started in Disability Sales. The Brokerage, Inc. and The DI Center

Transcription

1 Getting Started in Disability Sales The Brokerage, Inc. and The DI Center

2 Agenda I. What is DI? II. Why Provide DI? III. What Carriers Offer DI? IV. Policy Features V. Sample Proposals / Comparisons VI. Underwriting VII. Marketing / Sales VIII.Questions/Comments

3 What is Disability Income Insurance (DI)? Designed to replace income if too sick or hurt to work for an extended period of time Pays money to the client (not the doctor, hospital, etc.) Without DI, how would you survive financially without a paycheck? Savings? Friends/Family? The government? Group disability insurance at work?

4 Social Security Disability Tough definition Unable to perform the material and substantial duties of any job in the national economy or expected to die within 12 months 6 month waiting period On average it takes 2½ appeals for approval (for those approved) Meager Amounts 40.2% of disabled men and 63.9% of disabled women in 2010 received SSDI benefits of less than $1,000/month 4

5 Group STD/LTD Short Term Disability / Long-Term Disability Replaces a % of income up to a maximum monthly benefit (60% up to $6K per month) The Good Guarantee-issue Free (if employer-paid) / Low Cost The Bad Not portable No control Gotcha clauses Benefit reductions (social security, workers comp, etc.) 5

6 Putting it in Perspective 2 7x more likely than premature death Depends on gender & age Liars Figure and Figures Lie Average Duration of a long term disability (90 days+) is over 2½ years! Financially devastating for most One of few products that all financial advisors, consumer advocates and publications agree on! Why wouldn t you own a DI policy? 6

7 Why Sell DI? Clients Need It! Over 1 in 4 of today s 20 year-olds will become disabled* 90% of new long-term disability claims are caused by illnesses Fewer than 5% are work related** Clients Keep It! Can be provided at 1-3% of the insured s income Individual policies are portable even if the insured changes jobs Very persistent (99%+) Very good compensation 50% first year commission 5% - 20% renewals depending on carrier & sales volume Vested commissions * Social Contracting done at time of first Application Security Administration, Fact Sheet March 18, 2011 ** 2011 Council for Disability Awareness Long-Term Disability Claims Study 7

8 Our Primary Carriers Ameritas (Mutual) Most flexible product on the market Competitive in professional, white collar & gray/blue collar markets Principal (Stock) Very competitive in professional market (physicians, attorneys, CPAs, etc.) Illinois Mutual (Mutual) Targets the middle market 8

9 Policy Features Non-Cancellable & Guaranteed Renewable vs Guaranteed Renewable only NC/GR premiums guaranteed level GR only premiums designed to be level, but not grnteed Monthly Benefit Base NOT reduced by other disability benefits Social Insurance Substitute / Integrated Monthly Benefit IS reduced by SS disability/workers Comp disability Elimination Period (aka Waiting Period) 30, 60, 90, 180, 365 days 90 and 180 most common for incomes over $50K 30 or 60 common at lower incomes Benefit Period 2, 5 or 10 years To Age 65, To Age 67, To Age 70 9

10 Definition of Disability What does disabled mean? Three primary definitions; Own Occupation Own Occupation & Not Working Elsewhere Any Reasonable Occupation Contrast vs. Social Security / Group-LTD plan definitions 10

11 Optional Riders Residual (Partial) Provides a partial benefit if able to work part-time due to disability and income goes down Recovery Provides a partial benefit after recovery and return to FT work, but income continues to lag Cost of Living (COLA) CPI to 6% CPI to 3% Flat 3% Compounding vs simple Future Increase Options (FIO) Guarantees right to purchase more benefit later w/o medical underwriting Catastrophic - additional benefit for catastrophic loss 11

12 PICK TWO Benefit Amount Definitions Premium Client Picks Two Insurance Company Picks the Third! 12

13 Sample Illustrations Showing numerous / similar illustrations is ineffective Best to show a few options from the carrier that is the best fit Loaded / Moderate / Basic approach 13

14 Underwriting Requirements Medical Phone Interview Only requirement for most people earning under $100K Mini-Exam for higher benefit amounts Physical measurements/blood pressure/weight Blood/Urine Financial Non-Owner/EE usually W-2 or pay stub Business Owner tax return (maybe two!) Net Income AFTER Business Expenses 14

15 Underwriting Outcomes Approved as applied for Declined Modified Offer Exclusions for certain conditions Mental/Nervous Back Problems/Chiropractor Ratings (e.g. charge more premium) Modified Offer One Page Sales Aid TIP: Always explain this up front AND either ask about health/meds OR explain that M/N & Back exclusions are most common 15

16 How to Get A Quote Call The Brokerage or The DI Center Fax the Quote Request Form to The DI Center Request On-Line at ww.thedicenter.com 16

17 Marketing Discounts Multi-Life starts at 3 lives (15% discount) Association 15% Attorneys Physicians Insurance Agents Target Marketing Certain professions (understand their business/get referrals) Small Business Owners take advantage of multi-life discounts Owner gets a discount if he let s you offer disability to his employees and 1+ buy! Corporate all employees at the same company typically have the same need and same group disability coverage 17

18 Sales Ideas DI is SOLD (not a demand product) Insuring the Goose vs. just the eggs Job A vs. Job B 2% Rule Good/better/best presentation (where applicable) Anyone who depends on their income and has some disposable income is a candidate but agent must educate about the risk! 18

19 Which Pay Plan Would You Rather Have? Pay Plan A. Pays $8,333 per month while working Pays 0 if you become too sick or hurt to work OR Pay Plan B. Pays $8,233 per month while working Pays $5,000 tax-free if too sick or hurt to work 19

20 Questions & Comments Thank You! Toll free SELL DI Local