GSI and group LTD How to Leverage LTD for GSI Success For producer use only. Not for use with clients.DI 1318 12-14.

GSI and group LTDHow to Leverage LTD for GSI Success

For producer use only. Not for use with clients.DI 1318 12-14

disclosures

• In approved states, DInamic Foundation (forms 4501NC, 4502GR and 4503NCBOE) and DInamic Fundamental® (form 4504LS) are issued by Ameritas Life Insurance Corp. In New York, DInamic Foundation (forms 5501-NC, 5502-GR and 5503-NCBOE) and DInamic Fundamental® (form 5504-LS) are issued by Ameritas Life Insurance Corp. of New York. Policy and riders may vary and may not be available in all states.

•  This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company, including, but not limited to, Ameritas Life Insurance Corp., located at 5900 O Street, Lincoln, NE 68510, Ameritas Life Insurance Corp. of New York, located at 1350 Broadway, Suite 2201, New York, New York 10018 and Ameritas Investment Corp, member FINRA/SIPC. Ameritas Life Insurance Corp. of New York is licensed in New York. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com.

• Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® and DInamic Fundamental® are registered service marks of affiliate Ameritas Holding Company.

• © 2014 Ameritas Mutual Holding Company

For producer use only. Not for use with clients.DI 1318 12-14

For producer use only. Not for use with clients.

topics

• Differences between individual DI insurance and group LTD

• Opening doors – how to identify them!

• Next steps

• Closing remarks

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Ownership:

• Individual DI insurance is typically owned by the insured (issued a policy)

• Group LTD is owned by the employer (issued a certificate)

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Portability vs. Conversion

• Portability = you can take an individual DI insurance with you. Same policy form, same price, no new application required.

• Conversion = you would need to apply for something new. Group LTD would need to be converted to individual DI insurance. The policy changes and the price changes.

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Policy form (options):

• Three types of disability insurance

• Conditionally Renewable – Group LTD (long term disability)

• Guaranteed Renewable – individual DI insurance

• Noncancelable and Guaranteed Renewable – individual DI insurance

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Policy form (impact):• Group LTD

• Rate Guarantee Period (RGP) – after RGP, rates can change yearly regardless of the actual claims experience within a company.

• Opportunity for insurance company to make changes• Broker shops the coverage• “Perceived” as best time for changes/enhancements

• Individual DI insurance• No renewal – rates and coverage are fixed

(Noncancelable only)• GSI updates – update in-force benefits, add new lives• GSI updates – create opportunities to reinforce and

service

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Group LTD pricing thresholds:

• < or > 60% replacement ratio

• Usually up to $10,000 maximum benefit

• Non-contributory vs. contributory

• Length of Own Occupation period

• Social Security Normal Retirement Age (SSNRA) vs. To Age 65

• Package discounts for STD/LTD are going away

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Group LTD features and benefits:

• LTD always requires a loss of income to pay a benefit

• LTD policy terms like “actively at work” and “working full-time” can have negative impact on people who work 40+ hours

• “Any Occupation” - does mean vs. does not mean

• Strict definitions - emphasis on “returning to work”

• Benefits are offset - SS, SDI, WC, RRR

• Return to Work benefits - no reduction until >100%

• Mindset/Experience of LTD claims examiners vs. DI claims examiners

DI 1318 12-14

For producer use only. Not for use with clients.

differences

• Compensation

• Group LTD is not vested – being replaced as “broker of record” is a real threat

• Commissions – flat, graded, or net of commissions

• Compensation level tied to annual premium (comp reduces as premium increases)

• Broker compensation directly impacts the Group LTD premium

• Bonus programs available

DI 1318 12-14

For producer use only. Not for use with clients.

differences

Individual Producer

•Relationship with end user

•Vesting schedule

•Selling not telling

•Solution driven

•Partner with insurance company

•Technicians

Benefits Producer

•Relationship with buyer

•No vesting schedule

•Spreadsheet carriers (usually low price or highest benefit is the determinant)

•May be distracted by changes with medical business sold

•Wary of individual underwriting

Producer behavioral differences:

DI 1318 12-14

For producer use only. Not for use with clients.

opening doors

• Employees – all are important, all are not equal

• What to look for:

• Request for increase in Group LTD benefit maximum

• 66 2/3 LTD plans

• End of RGP – increases may occur at this time

• Life insurance schedules

• Classed plans

DI 1318 12-14

For producer use only. Not for use with clients.

opening doors

• Open doors lead to census data

• Full census data leads to effective plan design

• Effective plan design leads to sold cases

DI 1318 12-14

next steps

• Put me on your bid list!

• Add “supplemental DI for key executives” to your vocabulary

• Part of a comprehensive disability solution

• What are your “first five”?

• Clients/prospects who you believe would benefit from a GSI program

• Be a “trusted advisor”

• Clients look to you for solutions

DI 1318 12-14 For producer use only. Not for use with clients.

For producer use only. Not for use with clients.

closing remarks

• Promote importance of disability income insurance – be it individual or group LTD and become a good steward of your business and our industry

• It is not about group LTD or individual DI insurance – rather, it is about designing effective disability income insurance cost and benefit strategies

• Your GSI Regional Director and the entire GSI team have strong group LTD backgrounds – use us to your advantage!

DI 1318 12-14

key contacts

• Your agency or brokerage manager

• Your Ameritas® sales development team

• Your GSI regional director

• The DI product management team

For producer use only. Not for use with clients.DI 1318 12-14