Transcript DI 101 – Presentation

DI 101
Why DI?
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Definitions of Disability
 True Own Occupation Coverage
 Modified Own Occupation Coverage
 Transitional Own Occupation Coverage
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True Own Occupation
 Total Disability is the inability to perform
the material and substantial duties of
your occupation
 Can work in another occupation and
receive 100% of Monthly Benefit
regardless of new income
 Specialty Letter available
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Modified Own Occupation
 Cannot perform the material and
substantial duties of his/her own
occupation and not working in another
occupation
 Can choose to work in another
occupation but not forced to work
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Transitional Own Occupation
 Can work in another occupation and
receive 100% of Monthly Benefit until
new income plus disability benefit
exceeds the pre-disability earnings.
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Residual Rider
 Residual Rider has Own Occupation
coverage
 Cannot perform one or more duties of own
occupation to qualify for monthly benefit
 More than 15% loss of income or time
triggers claim (20% with some carriers)
 75% loss of income is considered a total
loss and full benefits are paid
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Specific or Presumptive Loss
 Loss of sight, hearing, speech or two
limbs is considered to be total loss and
loss does not have to be irrecoverable
 Waiting period waived
 Benefit commence immediately
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Future Increase Option
 Guarantees rates and occupation class
at the time of the original contract
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Future Increase Option
 No evidence of insurability required
 Must qualify financially
 Can exercise 100% of FIO within the first three
policy years (must qualify financially)
 FIO option available every policy anniversary
up to including age 55
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Non Cancellable and
Guaranteed Renewable
 Non Cancellable Premiums are
guaranteed and can never increase to
age 65/67
 Policy can never be modified
 Policy can never be cancelled if paying
premiums
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Nondisabling Injury Benefit
 Contractual provision built in UCL policy
 Will pay 100% of injury medical expenses
up to 50% of the base benefit, not to
exceed $3000
 Will pay per occurrence
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Good Health Benefit
 This provision is built into policy
 Will reduce the waiting period 2 days for
every year that no claim is filed
 Waiting period can never go below 30
days
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Automatic Increase Rider
 This provision increase the monthly
benefit by 4% each year for 5 year
benefit period
 No financial documentation required
 No evidence of insurability required
 Rider can be renewed after 5 years
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COBRA Rider
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Catastrophic Rider
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Step Rate
 Allows the premium to be lower for the
first 5 years to assist Medical Residents
in keeping cost down
 Rates step-up (increase) in the 6th year
and stays level thereafter.
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Why DI?
 Your ability to earn an income is the
greatest asset you will ever have
 We all need to protect our ability to earn
an income
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We all take risks every single day:
 Waking up/getting out of bed
 Driving to work
 Fire in home
 Dying
 Illness or Injury
We often protect ourselves from these risks:
 Health Insurance
 Auto Insurance
 Fire/Homeowners Insurance
 Life Insurance
What about the risk of becoming disabled?
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Odds For Different Risks
Covered By Insurance
1 in 96
Life
1 in 114
1 in 5
DI
1 in 21
Sources:
Fire, Auto, DI – National Safety Council, 2005
Death – World Almanac, 2005
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DI Statistics
The chart below illustrates that an individual’s chances of
disability are 2 to 3 times greater than death during their
working years (Commissioner's Individual Disability Table A.
1985)
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Your most valuable asset is probably
underinsured.
You insure…..
 Your home

Your car
But, what about your income?
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• Money Machine
• If you had a machine
that would give you
$275 everyday, what
would you do?
 You do have such a machine – it’s you!
 Make sure you protect your “money machine” if it breaks
down.
 You can help replace the income it is no longer making.
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• The Goose that laid the golden eggs
• If you had a goose that laid
golden eggs, which would you
insure?
• We all insure our home, our cars,
belongings – all these are the
“eggs”, but how about the
“goose” = your ability to earn an
income ?
Did you
forget to insure
ME ???
• Two job story
• Which job would you take ???
Healthy
Sick or hurt
Job “A”
$100,000
Job “B”
$99,000
- 0 -
$60,000
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• Do you carry a spare tire in your car at all times?
• Why? Are you planning
on getting a flat today?
• No, but if you need it, it’s
there!
• Protect your income
NOW while you can,
BEFORE you need it!
“I can depend on Social Security to pay
disability benefits to keep me and my family
out of financial trouble, right?”
Not really ………
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Protect Your Most Valuable Asset
Average Income to Age 67
Current
Age
$25,000
$35,000
$50,000
$60,000
$100,000
$125,000
$150,000
30
925,000
1,295,000
1,850,000
2,220,000
3,700,000
4,625,000
5,550,000
35
800,000
1,120,000
1,600,000
1,920,000
3,200,000
4,000,000
4,800,000
40
675,000
945,000
1,350,000
1,620,000
2,700,000
3,375,000
4,050,000
45
550,000
770,000
1,100,000
1,320,000
2,200,000
2,750,000
3,300,000
50
425,000
595,000
850,000
1,020,000
1,700,000
2,125,000
2,550,000
55
300,000
420,000
600,000
720,000
1,200,000
1,500,000
1,800,000
60
175,000
245,000
350,000
420,000
700,000
875,000
1,050,000
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Other Financial Means
How would you replace your lost income?

Savings?
One year of disability can wipe out 10 years of savings.
1
1 - The Life Underwriting Training Council. “Fundamentals of Financial Services Course.” Volume 6, 1997
edition.

Borrow?
What bank would lend you money if you were disabled and
unemployed?

Social Security?
To qualify, your disability must be expected to last at least
2
12 months or end in death, in addition to other requirements.
2 - You must also be unable to engage in ANY occupation.
Other Income?
Could you maintain your standard of living without placing
additional strain on you and your family?
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The Good News and Bad News
Good News
Bad News
People are
living longer.
Diseases that used to
cause death are now
leaving people disabled.
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Disability On the Rise
100%
80%
60%
40% 70%
20%
0%
-20%
-40% -73%
-60%
-80%
-100%
44%
-29%
36%
-48%
36%
55%
-27% -32%
Death
Disability
Disability
Death
Heart
Diabetes
All
Diseases
Four
Cerebrovascular
Hypertension
Source: National Center for Health Statistics - 1999
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Likelihood of becoming disabled
0
2
4
Every 4 seconds someone is
disabled at home.
6
8
10
12
14
Every 9 seconds
someone is disabled
at work.
Source: National Safety Council, Injury
Facts 2004 Edition (NSC estimates)
Every 13 seconds
someone is disabled
in a motor vehicle.
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Everything Rests on Income
Act now to protect your
clients‘ most valuable asset –
THEIR INCOME
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Thank you!
Questions?
Leading Edge Disability Center
888-677-6575
[email protected]
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