Supplemental Income Protection Program A Program for Offering Individual Disability Income Insurance to Employees Presented By: Darin Brown Regional Director for Multi Life Disability LIFE DISABILITY INCOME INVESTMENTS RETIREMENT EMPLOYEE BENEFITS
Facts about Disability 1 in 4 2½ years 50% 90% Of today's 20 year- olds will become disabled before they retire* Average duration of a long- term disability** Employees specifically interested in disability income protection*** Of disabilities are caused by illness (not accidents/injuries)**** *Social Security Administration, Fact Sheet March 18, 2011. **2010 Gen Re Disability Fact Book ***Guardian Workplace Benefits Study, 2012. ****The 2012 Council for Disability Awareness (CDA) Long- Term Disability Claims Review.
The Need to Supplement Group Coverage Group LTD is a solid foundation ü Typically replaces 60% of income to certain monthly maximum benefit ($5,000/$10,000/$15,000) ü Designed to provide basic income protection for all benefit eligible employees with cost effective coverage Gaps in protection can arise ü Not based on individual employee s personal income situation ü One- size- fits- all strategy leaves those with the highest compensation least protected ü Group LTD benefits are usually taxable to the employee ü Group LTD benefits offset with any other disability income (e.g. S.S) ü Group LTD usually covers salary only
Purpose of Multi Life IDI Designed to meet the income protection needs of higher compensated employees and executives Fills in gaps in coverage from Group LTD Enhance companies benefits package with minimal to zero cost
Employee Census
Examples Group LTD plan 60% to $10,000/mo Annual Income Maximum Group LTD Benefit % Income Replaced $150,000 $90,000 60% $200,000 $120,000 60% $250,000 $120,000 48% $300,000 $120,000 40% $350,000 $120,000 34% $400,000 $120,000 30% $450,000 $120,000 27% $500,000 $120,000 24%
Product Highlights Permanent Case Discounts ü Less expensive then buying IDI in the open market Covers all earned income ü Salary ü Bonus/incentive compensation ü Retirement contributions (and employer matches) Premiums are guaranteed never to increase to age 65 EE s Own their coverage Stronger income protection then Group LTD Guaranteed Standard Issue (GSI) ü No medical underwriting ü 3 qualifying questions: U.S Citizen? Actively at work? Are you currently disabled?
Guaranteed Standard Issue (GSI) FULL FINANCIAL UNDER- WRITING FULL MEDICAL UNDER- WRITING Guaranteed Standard Issue (GSI) Fully UnderwriQen (used when applying for individual coverage outside of this offer ) Current Income Current & 2 previous years tax returns Complete Physical Exam (including Blood & Urine) Client History Interview ---- AQending Physician Statement ---- Pre- exis`ng Condi`on Limita`on ---- ---- ---- Avoca`on Ques`onnaire ---- Motor Vehicle History Report ---- Family Medical History ----
What to look for? In force Group LTD plan is ER paid (taxable) Significant employee population who earn $100,000 or more Group LTD covers salary only Reverse Discrimination Recruiting, Retention & Reward of key employees is important Client looking to upgrade their benefits package and enhance their income protection program High Group LTD benefit caps: Transfer part of the risk to IDI
ER Paid IDI GSI Cases Starts with 5 executives earning $100,000 or more GSI offerings increase with 10 executives or more Premiums can be Grossed- Up to provide a tax free benefit Short Form Application Seamless implementation process
Voluntary IDI GSI Cases Available to companies with at least 75 eligible employees earning $75,000- $100K or more Creates the greatest income protection buy- up program in the industry 3 Voluntary Plan Options: Good, Better, Best Multi Communication Strategies: personalized enrollment kits, group meetings, (e) and hard copy communications, call center support Primary Enrollment Methodology: Proprietary on- line system paperless enrollment
Reasons Companies Offer Voluntary IDI No cost to the company Employees ask for the benefit Attract & retain employees Improves employee morale Provides employees a wider array of options Better options for employees than purchasing on their own *LIMRA, Weathering the Storm Report, 2011.
Comprehensive Enrollment Services Our Guiding Principles Align with client s benefit culture Provide first- class service and expertise so client can remain focused on their business Utilize an educational approach so every employee feels confident in their purchase decision
Enrollment Flow Insurance Company of America, New York, NY, or provided by Guardian. Product provisions and features may vary from state to state. Optional rider are available for additional premium. 2013-4409 (Expires 05/2015)
Communication Strategy Recommendation Insurance Company of America, New York, NY, or provided by Guardian. Product provisions and features may vary from state to state. Optional rider are available for additional premium. 2013-4409 (Expires 05/2015)
In Summary For the Employer More income protection for higher- earning executives Enhances the ability to recruit, retain, reward Increased education on company s existing benefits First- class implementation & support Custom communication strategy For Employees Tailored income protection Guaranteed Standard Issue (GSI) Discounted IDI Coverage Coverage is fully portable Premiums are guaranteed never to increase to age 65 Personalized enrollment education Disability insurance underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY, or provided by Guardian. Product provisions and features may vary from state to state. Optional rider are available
Proposal Process Call Darin Brown at (847) 626-4419 or email me at darin_brown@glic.com Need two things 1) Excel Census Name, Date of Birth, Job `tle/occupa`on, gender, total income (salary + incen`ve compensa`on) 2) PDF of client s Group LTD booklet