Complete DI Changing the Market – One Case at a Time!

transcript

Complete DIComplete DIChanging the Market – One Case at a

Time!Changing the Market – One Case at a

What is Complete DI?What is Complete DI?

A Fundamental Change in the Way

You Present Disability Income Solutions to

your Client!

A Fundamental Change in the Way

You Present Disability Income Solutions to

your Client!

The “Old” ParadigmThe “Old” Paradigm

Disability Insurance Treated as a Commodity!

What is a Commodity?What is a Commodity?

Commodity – “…a product which is interchangeable with another product of the same type…”

The Commodity SlideThe Commodity Slide

Stage One

High Prices & High Profits

Stage Tw

o – The Slide

Stage Three

Rock Bottom Prices & Low

Profits

Instant SurveyInstant Survey

Do Your Clients View Disability Insurance As A Commodity?

Yes - ??%

No - ??%

Do Your Clients View Disability Insurance As A Commodity?

Yes - ??%

No - ??%

ExampleExample

Mr. Smith, you have a solid group disability income plan which provides 60% of income to your age 65. You have an age 65 own occupation definition for a low rate of .25 cents per $100.

So…let’s talk about your Medical Renewal…

Mr. Smith, you have a solid group disability income plan which provides 60% of income to your age 65. You have an age 65 own occupation definition for a low rate of .25 cents per $100.

So…let’s talk about your Medical Renewal…

Why Is This Important?Why Is This Important?

Because People DO Become Disabled!

43% of all individuals age 40 will have a long term disability event (90 days or longer) by age 65.

Field Guide to Estate Planning, Business Planning, & Employee Benefits

National Underwriter

Because People DO Become Disabled!

43% of all individuals age 40 will have a long term disability event (90 days or longer) by age 65.

Field Guide to Estate Planning, Business Planning, & Employee Benefits

National Underwriter

In-Complete DIIn-Complete DI

The Traditional Plan and Process Delivers In-Complete Results!

Disability Contract BasicsDisability Contract Basics

Most Don’t Understand the Importance of the Basics

How Do I Qualify?

How Soon Do Benefits Start?

How Long Will Benefits Last?

How Much Will I Get?

Most Don’t Understand the Importance of the Basics

How Do I Qualify?

How Much Will I Get?

How Do I Qualify?How Do I Qualify?

Pre-Existing ConditionUnderwritten or Guaranteed

Issue?Exclusions and/or LimitationsDefinitions of Disability

“First” Definition“Second” Definition

Pre-Existing ConditionUnderwritten or Guaranteed

Issue?Exclusions and/or LimitationsDefinitions of Disability

“First” Definition“Second” Definition

How Do I Qualify?How Do I Qualify?

Definitions of Disability Either Occupation or Earnings Test Both Occupation and Earnings Test Occupation Loss Only Earnings Loss Only

How Long Does The “First” Definition Last?

Definitions of Disability Either Occupation or Earnings Test Both Occupation and Earnings Test Occupation Loss Only Earnings Loss Only

How Long Does The “First” Definition Last?

Qualifying Periods

Consecutive Days

Trial Return to Work Days

Partial Disability

Zero-Day Residual

Qualifying Periods

Consecutive Days

Trial Return to Work Days

Partial Disability

Zero-Day Residual

“First Definition” Transitions to “Second Definition” of Disability Limited Benefits for Special Conditions Age 65 or SSNRA Maximum Capacity Language Mandated Rehabilitation Return to Work

How Much Will I Get?How Much Will I Get?

Rate of Benefit / Contract Amount Definition of Earnings Taxation of Benefit Additional Degree of Disability Benefits Retirement Replacement Cost of Living Adjustments

Complete DIComplete DI

You Must Consider More Than Price and a Short “Summary” of Plan Benefits!

Why DI Can’t Be Sold On Price!

Choices – Marketplace is Full of Carriers Who Quote on Rate Only. On a Scale of 1-10 Most Benefit Brokers Rank Their Knowledge of Health Insurance Between 8-10. Most Benefit Brokers Rank Their Knowledge of Disability Insurance Between 5-7.

What is the Most Important Part of

a Disability Contract?

What is the Most Important Part of

a Disability Contract?

Own Occupation Period Benefit Duration

Maximum Benefit Amount Definition of Disability

Price Elimination Period Benefit Percentage

Taxability of Benefits

Own Occupation Period Benefit Duration

Maximum Benefit Amount Definition of Disability

Price Elimination Period Benefit Percentage

Taxability of Benefits

Own Occupation Period - % Benefit Duration - %

Maximum Benefit Amount - % Definition of Disability - %

Price - % Elimination Period - % Benefit Percentage - %

Taxability of Benefits - %

Own Occupation Period - % Benefit Duration - %

Maximum Benefit Amount - % Definition of Disability - %

Price - % Elimination Period - % Benefit Percentage - %

Taxability of Benefits - %

Definition of DisabilityDefinition of Disability

Every Feature of a Disability Contract Hinges on the Definition of Disability.

Nothing Else in the Contract is Relevant Unless the Claimant is Considered Disabled by the Insurance Carrier.

Every Feature of a Disability Contract Hinges on the Definition of Disability.

Nothing Else in the Contract is Relevant Unless the Claimant is Considered Disabled by the Insurance Carrier.

Caveat EmptorCaveat Emptor

Definition – “Let the Buyer Beware”

Assumption is That the Insurance Carrier is “Hiding Something” and not Trying to Not Fulfill Its Promise!

Definition – “Let the Buyer Beware”

Assumption is That the Insurance Carrier is “Hiding Something” and not Trying to Not Fulfill Its Promise!

More Accurate MeaningMore Accurate Meaning

“Let the Buyer BE AWARE! Most Insurance Carriers Perform to

the Exact Definitions of the Contract. It is the Producers Responsibility to

Fully Explore and Explain the Product and the Process!

“Let the Buyer BE AWARE! Most Insurance Carriers Perform to

the Exact Definitions of the Contract. It is the Producers Responsibility to

Fully Explore and Explain the Product and the Process!

Words Have MeaningWords Have Meaning

Disability is the inability of the insured to perform a substantial and material duties of his/her occupation

Disability is the inability of the insured to perform the substantial and material duties of his/her occupation

Disability is the inability of the insured to perform all the substantial and material duties of his/her occupation

Disability is the inability of the insured to perform all the substantial and material duties of his/her occupation and have a 20% loss of earnings due to the sickness or injury

Disability is the inability of the insured to perform all the substantial and material duties of his/her occupation or have a 20% loss of earnings due to the sickness or injury

Basic Monthly Earnings, not including overtime pay, bonuses, and other compensation not received as basic wages or salary.

Basic Monthly Earnings, including overtime pay, bonuses, and other compensation received during the prior full calendar year.

Basic Monthly Earnings, including overtime pay, bonuses, and other compensation received during the prior full calendar year, including the amount of any pre-tax deferrals.

Basic Monthly Earnings, including overtime pay, bonuses, and other compensation received during the prior full calendar year, including the amount of any pre-tax deferrals. For Principals of a Partnership, a monthly average or income reported on Schedule K-1.

What’s the Highest Percentage of Your Client’s Income You Can Insure With

Disability Insurance?

What’s the Highest Percentage of Your Client’s Income You Can Insure With

Disability Insurance?

• 60% - ??%60% - ??%• 66 2/3% - ??%66 2/3% - ??%

• 70% - ??%70% - ??%• 85% - ??%85% - ??%

• 100% - ??%100% - ??%• 100% + - ??%100% + - ??%

The Problem

Annual Base Income

+Annual Bonus Income

=Total

Monthly Income

Net Monthly Income

Gross Group Monthly Benefit

Net Group Monthly Benefit

Percentage of Income

Replacement$50,000 $5,000 $4,583 $3,071 $2,500 $1,675 55%

$80,000 $8,000 $7,333 $4,913 $4,000 $2,680 55%

$100,000 $10,000 $9,167 $6,142 $5,000 $3,350 55%

$125,000 $12,500 $11,458 $7,677 $5,000 $3,350 44%

$150,000 $15,000 $13,750 $9,213 $5,000 $3,350 36%

$200,000 $20,000 $18,333 $12,283 $5,000 $3,350 27%

Assumes 33% tax bracket.

The Problem

Annual Base Income

=Total

Monthly Income

Net Monthly Income

Gross Group Monthly Benefit

Net Group Monthly Benefit

Replacement$50,000 $5,000 $4,583 $3,071 $2,500 $1,675 55%

$80,000 $8,000 $7,333 $4,913 $4,000 $2,680 55%

$100,000 $10,000 $9,167 $6,142 $5,000 $3,350 55%

$125,000 $12,500 $11,458 $7,677 $5,000 $3,350 44%

$150,000 $15,000 $13,750 $9,213 $5,000 $3,350 36%

$200,000 $20,000 $18,333 $12,283 $5,000 $3,350 27%

The Typical In-Complete DI Plan

In addition ~ You will lose your benefits, contributions to retirement plans and more!

LTD Plan Benefits 60% of Salary to a maximum of $5,000 a month.

The Solution

Annual Base Income

=Total

Monthly Income

Group Monthly Benefit

IDI BenefitCatastrophic

Benefit

Replacement$50,000 $5,000 $4,583 $2,500 $938 $1,146 100%

$80,000 $8,000 $7,333 $4,000 $1,500 $1,833 100%

$100,000 $10,000 $9,167 $5,000 $1,875 $2,292 100%

$125,000 $12,500 $11,458 $5,000 $3,594 $2,865 100%

$150,000 $15,000 $13,750 $5,000 $5,313 $3,438 100%

$200,000 $20,000 $18,333 $5,000 $8,750 $4,583 100%

The Solution

Annual Base Income

=Total

Monthly Income

Group Monthly Benefit

IDI BenefitCatastrophic

Benefit

Replacement$50,000 $5,000 $4,583 $2,500 $938 $1,146 100%

$80,000 $8,000 $7,333 $4,000 $1,500 $1,833 100%

$100,000 $10,000 $9,167 $5,000 $1,875 $2,292 100%

$125,000 $12,500 $11,458 $5,000 $3,594 $2,865 100%

$150,000 $15,000 $13,750 $5,000 $5,313 $3,438 100%

$200,000 $20,000 $18,333 $5,000 $8,750 $4,583 100%

The Complete DI Plan Solution

The Complete DI Plan Replaces 100% of Cash Compensation for the Most Catastrophic Disability

LTD Plan Benefits 60% of Salary to a maximum of $5,000 a month.

In-Complete DIIn-Complete DI

The Traditional Plan and Process Delivers In-Complete Results!

A Complete DI Plan and Process Delivers Complete Results!

Complete DI Changing the Market – One Case at a Time!

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