Disability Income Disability Income 2 Hour CE Dawn M. Boyer, MBA - PowerPoint PPT Presentation

Disability Income Disability Income 2 Hour CE Dawn M. Boyer, MBA LUTCF Executive Vice President GordonMarketing.com 800.388.8342

Why do your clients NEED Disability Income Protection? i ? GordonMarketing.com 800.388.8342

Have a Story to Tell Lifehappens org Lifehappens.org GordonMarketing.com 800.388.8342

18% of consumers 18% of consumers remember their agent or advisor mentioning income protection. Most DI sold by Most DI sold by CLIENTS Asking! LIMRA –2009 GordonMarketing.com 800.388.8342

Disability On the Rise GordonMarketing.com 800.388.8342

Keep It Simple for your Client! Keep It Simple for your Client! Elimination Period Benefit Period Benefit Amount How long before How long will How much will the payments start? payments last? payments be? GordonMarketing.com 800.388.8342

How does Disability Insurance work? Occupation Definitions FIRST Occupation Definitions FIRST O Own ‐ Occ O You are unable to EXAMPLE: If a surgeon develops a tremor that perform the prevents him from practice as a surgeon, he can substantial and substantial and collect disability benefits even if he returns to ll t di bilit b fit if h t t material duties of work as a family practice physician. Your Regular Occupation; and you If he was earning $300,000 a year as a surgeon and had If he was earning $300,000 a year as a surgeon and had are under regular a $180,000 DI benefit. While collecting the DI benefit of care of a Physician $180,000 per year, he can earn an income of $150,000 appropriate for your per year (or any other amount) as a family practice p y ( y ) y p Injury or Sickness. Injury or Sickness physician. Not bad, huh? GordonMarketing.com 800.388.8342

How does Disability Insurance work? Definitions FIRST Definitions FIRST M difi d O Modified Own ‐ Occ O EXAMPLE: Once Dr. Brown returns to work as a You are unable to perform family practice physician, he can no longer the substantial and the substantial and collect full disability. ll t f ll di bilit material duties of Your Regular Occupation; and you are not engaged in His disability benefit will be based on a percentage of lost His disability benefit will be based on a percentage of lost any other gainful or reduced income. In this case, his annual benefits of occupation; and you are $180.000 would be reduced to $90,000 due to having a under the regular care of 50% loss of income. Remember his income is now a Physician appropriate Ph i i i $150,000 instead of his pre ‐ disability income of $300,000. for Your Injury or Sickness. GordonMarketing.com 800.388.8342

How does Disability Insurance work? Definitions FIRST Definitions FIRST G i f l OCC Gainful ‐ OCC Because of injury or EXAMPLE: The insurance company will determine sickness you are what type of work is suitable for Dr. Brown. unable to perform the unable to perform the material and substantial duties of The insurance company determines what type of work is Your Occupation, or suitable for Dr. Brown. If Dr. Brown were deemed suitable Any Occupation for for other work due to his prior education, training or which you are deemed experience, he would not be eligible for any DI benefit. reasonably qualified by Would the insurance company expect him to flip burgers? education training or education, training or Probably not. But, why take the chance? experience. GordonMarketing.com 800.388.8342

How does Disability Insurance work? Other Definitions Other Definitions Presumptive Clause This provision says that the policy will waive the elimination period p y p y p and begin paying benefits from the first day of Presumptive Total Disability. The insured is presumed to be totally disabled if he/she suffers the permanent loss of (a) the sight of both eyes; (b) the use of both hands; both feet or one hand and one foot (c) speech (d) f b th h d b th f t h d d f t ( ) h (d) hearing in both ears. Stroke is an example of this. GordonMarketing.com 800.388.8342

How does Disability Insurance work? Definitions FIRST Definitions FIRST The Recurrent Disability Clause The clause defines how the carrier will respond to recurrent bouts with the same disabling illness or injury. Many policies state that if the same disability recurs within six months following cessation of benefits, the recurrence will be treated as a continuation, and the elimination period and benefit period do not start over. GordonMarketing.com 800.388.8342

How does Disability Insurance work? Definitions FIRST Definitions FIRST The Concurrent Disability Clause This provision says that benefits will be paid for one disabling condition at a time Even if there are multiple causes of disability condition at a time. Even if there are multiple causes of disability, the policy will treat the culmination of causes as one disabling claim. GordonMarketing.com 800.388.8342

How does Disability Insurance work? Definitions FIRST Definitions FIRST Waiver of Premium Clause The clause waives any premium due after 90 days of disability. Note: If client disabled on January 1, they should continue to pay premium that is due each month. Once it exceeds 90 days the insurance carrier will refund any premium paid during the elimination period. HOWEVER, if client’s premium was paid annual, semi ‐ annual or quarterly f l ’ d l l l and not due during the first 90 days he would not be eligible for a refund. GordonMarketing.com 800.388.8342

Riders Riders Automatic Benefit Increase Rider (ABIR) This rider increases the BASE monthly benefit to keep pace with inflation. Payments will continue to increase each year while payable under the policy P t ill ti t i h hil bl d th li until the base policy monthly benefit payment has increased to twice the original amount. ABIR is much more important to a client who was permanently disabled at age 26 than it is to a client who is disabled at age 56. GordonMarketing.com 800.388.8342

Riders Riders Catastrophic Disability Benefit Rider This rider pays an additional benefit if the insured is receiving total disability benefits and is unable to perform at least two activities of daily living (ADL’s); b fit d i bl t f t l t t ti iti f d il li i (ADL’ ) has a severe cognitive impairments’ or is presumptively totally disabled. GordonMarketing.com 800.388.8342

Riders Critical Illness Benefit Rider This rider pays an additional benefit if the insured is receiving total disability benefits and is unable to perform at least two activities at least two activities of daily living (ADL’s); has a severe cognitive impairments’ or is presumptively totally disabled. GordonMarketing.com 800.388.8342

Riders Riders Guaranteed Insurability Rider This rider gives the insured the option to increase their base policy monthly benefit by purchasing additional amounts of insurance. Additional amounts b fit b h i dditi l t f i Additi l t will have the same benefit period and elimination period as the policy. Increases do not require evidence of insurability and are based on the insured's current income insured s current income. First available dates is 2 years after policy issue and 2 years in between dates, up to five times total GordonMarketing.com 800.388.8342

Riders Riders Non ‐ Cancelable Rider This provision guarantees that after a policy is placed in ‐ force, there will be no changes to the premium or to the policy benefits through g p p y g age 65 – regardless of the insured’s working status, health or income level. GordonMarketing.com 800.388.8342

Riders Riders Residual Disability Benefit Rider This rider will pay a monthly benefit if the insured is residually disabled and the elimination period has been satisfied. Renewal p premiums will be waived on the first premium due date after the insured has been residually disabled for the elimination period or 90 days. Example: If disability causes loss of income (commission) then will pay proportionately. GordonMarketing.com 800.388.8342

Riders Riders Retroactive Injury Benefit Rider This rider will pay a benefit if an injury causes the insured to become totally disabled within 30 days of the injury and the insured y y j y remains continuously totally disabled until the end of the elimination period. GordonMarketing.com 800.388.8342

Riders Riders Return of Premium This rider will pay a returned premium upon policy cancellation, lapse, death or attained age 65. It is on a sliding percentage scale and all benefits paid tt i d 65 It i lidi t l d ll b fit id are subtracted before a lump sum is paid. GordonMarketing.com 800.388.8342

Riders Riders Supplemental Social Insurance Benefit (SSID) If an insured does not qualify for Social Security benefits, this rider increases th the monthly disability benefit dollar for dollar up to limits. thl di bilit b fit d ll f d ll t li it How long do you think it will be before SS runs out of Disability Income money? GordonMarketing.com 800.388.8342

Types of Policies Types of Policies • Simplified Disability Income • Graded Benefit • Business Overhead Expense • Individual Disability Income GordonMarketing.com 800.388.8342