1 Preserving Financial Security with Individual Disability Income Insurance Presented by: Kevin...
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1 Preserving Financial Security with Individual Disability Income Insurance Presented by: Kevin Cloutier, Vice President Disability Resource Group, Inc.
Transcript of 1 Preserving Financial Security with Individual Disability Income Insurance Presented by: Kevin...
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Preserving Financial Security withIndividual Disability Income Insurance
Presented by:
Kevin Cloutier, Vice PresidentDisability Resource Group, Inc.
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L o n g A g o
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T r a d e a n d B a r t e r
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The Industrial Revolution
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Income earning skills for the necessities of life
• Food• Transportation• Clothing• Recreation• Home• Health Care• Education• Comfort
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Workers Compensation – 1908
Unemployment Compensation – 1919
Social Security Retirement Income – 1935
Cash Sickness Income Plans – 1942
Social Security Disability – 1956
Government Programs
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T a x L a w s
• Retirement Plans• Profit Sharing• IRA’s• Pensions• Keoghs• 401K’s
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O L D A G E
Retirement Income
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Leaving the problem of disability income replacement to an
individual’s personal planning.
FINANCIAL SECURITY
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Disabled? Me? Never!
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Limra Study
What is the #1 reason why clients do not buy disability insurance?
They have never been asked
What is the #1 reason why producers do not sell disability insurance?
They do not ask
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“I just got my client life insurance, now we are looking into the
disability.”
Approach differently
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Disability On the Rise
70%44% 36% 36%
55%
-73%
-29%-48%
-27% -32%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Death
Disability
Hypertension
Cerebrovascular
DiabetesAll
Four
HeartDiseases
Source: JHA Disability Fact Book -2004 Edition
DisabilityDeath
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The Reality• 30% of all people 35 to 65 will suffer a
disability for at least 90 days and one in seven will be disabled for five years.*
• There is a disability caused by a motor vehicle crash every 30 seconds. **
• One out of every two Mortgage foreclosures is due to a disability. 2% because of death. ***
* Health Association of America; * Health Association of America; The New York Times, 02.05The New York Times, 02.05
****National Safety Council Accident Facts, 02.05National Safety Council Accident Facts, 02.05
*** Health Affairs, The policy journal of Health Sphere, 02.05*** Health Affairs, The policy journal of Health Sphere, 02.05
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Everything Rests on IncomeEverything Rests on Income
The Reality
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What is your most Valuable Asset?
Income
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The Money Tree
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Protect Your Most Valuable Asset
Current Age
$25,000 $35,000 $50,000 $60,000 $100,000 $125,000 $150,000
30 875,000 1,225,000 1,750,000 2,100,000 3,500,000 4,375,000 5,250,000
35 750,000 1,050,000 1,500,000 1,800,000 3,000,000 3,750,000 4,500,000
40 625,000 875,000 1,250,000 1,500,000 2,500,000 3,125,000 3,750,000
45 500,000 700,000 1,000,000 1,200,000 2,000,000 2,500,000 3,000,000
50 375,000 525,000 750,000 900,000 1,500,000 1,875,000 2,250,000
55 250,000 350,000 500,000 600,000 1,000,000 1,250,000 1,500,000
60 125,000 175,000 250,000 300,000 500,000 625,000 750,000
Average Income to Age 65Average Income to Age 65
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Debt
Savings Depleted!
Disability
Normal Income
Normal Expenses
Savings
Healthy
When disability strikes, your financial security changes
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“I don’t sell disability insurance, I sell health insurance.”
50%
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Do you have a comprehensivehealth insurance plan?
An unbalanced health insurance plan:
You andYour Family
HealthInsurance
Health Insurance helps cover:
• Hospital bills• Doctor’s bills• Medications
• Other medical treatment
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Do you have a comprehensive health insurance plan?
A balanced health insurance plan:
Health Insurance helps cover:
• Hospital bills• Doctor’s bills• Medications
• Other medical treatment
Disability Income Insurancehelps provide funds for:
• Food• Clothing• Housing
• Transportation• Insurance premiums • Continued retirement
• College education
DisabilityIncome
Insurance
You and Your Family
HealthInsurance
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“I don’t sell disability insurance, I sell investments and manage
money.”
INCOME
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Why else don’t you sell financial security…
Complicated Product
Expensive
Underwriting Stinks
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B e l i e v e
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B e l i e v e
B u y
M a k e a h a b i t o f i t !
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Complicated…
Social Security Definition of Disability
The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person must be not only unable to do his or her previous work or work commensurate with the previous work in amount of earnings and utilization of capacities but cannot, considering age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy. It is immaterial whether such work exists in the immediate area, or whether a specific job vacancy exists, or whether the worker would be hired if he or she applied for work.
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Too expensive…
• Age 50+ does get expensive
• Females are priced higher than males
• Find a premium that fits into their budget
• Look for Multi-life discount opportunities
• Don’t sell a policy with all the additional riders
• Make sure you gave the right income when asking for a proposal
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Which Job Would You Rather Have?
Job A Job B
Healthy $100,000 a year salary without disability income insurance
$98,000 a year salary with disability income insurance
Sick/Hurt $0 a year salary without disability income insurance
$60,000 a year salary with disability income insurance
Too expensive…
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Too expensive…
Can you really put a price on what it will cost you?
Health
Future Earnings
Insurability
Assets
Self-respect or Self-worth
Peace of Mind
Loss of Credit Rating
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Discounts
3+ lives with same employer
> 15% - 20% Discount
> Unisex rates: 25% savings for females
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Underwriting is too difficult…
INCOME
OCCUPATION
HEALTH
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Pre-Screen Income
– Salaried employee: W-2
– Business Owner: • Sole Proprietor: Net Profit (Sched C, Line 31)
• S Corporation: Share of 1120S ordinary income (Sched K-1, Line 1) plus salary (W-2) plus pension
• Partnership: Schedule K-1 (1065)
• C-Corporation: Share of 1120 taxable income (page 1 line 28) plus salary (page 2 Schedule E) plus pension
• LLC: Depends on how they file
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Pre-Screen Occupation
• Occupation– What do you do on a daily basis?– Where do you perform those duties?– How long have you been performing those
duties?
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Pre-screen Medical Issues
• Diabetes• Depression and Anxiety Medication• Chiropractic visits, Back Issues• Build Issues• High Cholesterol / High Triglycerides• Sleep apnea• Unresolved conditions, no diagnosis• Surgeries• Ulcerative Colitis
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O t h e r I s s u e s
Part Time
Working from Home
Newly self-employed
High Net worth
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Take SOME Underwriting out of the Sale
Simplified Issue ProgramsPrincipal, Met, Assurity and others
• No Financials, Non-Medical• Certain Guidelines• Teleapp process
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Take ALLUnderwriting out of the Sale
• Guaranteed Standard Issue- Employer Sponsored Cases
Offers as low as 3 livesWorthwhile offers: 15-20 livesGreat Offers 20+ livesDiscounts of 20%-30%Unisex rates (huge savings for females)Available to Physicians on a limited basis
- No Medical Underwriting- No Financial Underwriting
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A COMPLETE PORTFOLIO OF PRODUCTS
forFINANCIAL SECURITY
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Individual Coverage
Business Overhead Expense
Buy-Sell
Key Person
Financial Security Portfolio
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Retirement Completion
Loan Protection
Impaired Risk
High Limit
Financial Security Portfolio
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Ask yourself
Can my clients invest without income?
Can my clients continue to pay for other insurance without income?
Can my clients pay for health insurance without an income?
What will I say to my clients when they get injured or sick and have no income because they can’t work …
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What are Others Saying?
“Coverage isn’t cheap. Due to price you may be tempted to forgo this insurance. Don’t. The consequences of going without it can be financially and emotionally devastating.” - Money Magazine
“Before worrying about savings, one had better protect their income.”
- USA Today
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What are Others Saying?
“Failure to reflect on potential disability and provide for this possibility can wreak financial havoc on even the most successful professional.” - Making the Most of Your Money
Jane Bryant Quinn
“If you work for a living and have no disability insurance, you effectively have no financial plan.” - The Practice Lawyer
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“Even the individual of limited means can eventually pay big bills and big debts if only
he retains the ability to work and earn a living. When that is lost, all is lost unless
funds are available to replace the earnings”
CHANGING TIMES
- The Kiplinger Magazine
What are Others Saying?
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Will you be sending your best clients a get well card when they get sick or hurt or will you be calling them and asking if they received their disability income benefits?
What will you say?
