GSI and group LTD How to Leverage the LTD for GSI Success For Producer use only. Not for use with clients. DI 1318 5-14.

GSI and group LTDHow to Leverage the LTD for GSI Success

For Producer use only. Not for use with clients.DI 1318 5-14

disclosures

• In approved states, Disability Income insurance (forms 4501NC, 4501NC CA, 4502GR, 4502GR CA, 4502GR RES CA, 4503BOE and 4503BOE CA) is issued by Ameritas Life Insurance Corp. located at 5900 O Street, Lincoln, NE 68510. In New York, Disability Income insurance (forms 5501-NC, 5502-GR and 5503-BOE) is issued by Ameritas Life Insurance Corp. of New York located at 1350 Broadway, Suite 2201, New York, NY 10018. 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., Ameritas Life Insurance Corp. of New York and Ameritas Investment Corp., member FINRA/SIPC. Ameritas Life Insurance Corp. is not 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.

• When implementing a GSI program, you should always advise your clients to speak with an attorney to determine if there are ERISA issues.

Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® is a registered service mark of affiliate Ameritas Holding Company. © 2013 Ameritas Mutual Holding Company

For Producer use only. Not for use with clients.DI 1318 5-14

For Producer use only. Not for use with clients.

topics

• Differences between individual DI insurance and group LTD

• Opening doors – how to identify them!

• Closing remarks

DI 1318 5-14

For Producer use only. Not for use with clients.

differences

• Ownership:

• Individual DI insurance is typically owned by the insured

• Group LTD is owned by the employer

DI 1318 5-14

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 5-14

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 5-14

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 5-14

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 5-14

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 5-14

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 5-14

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 games (low price)

•May be distracted by changes with medical business sold

•Wary of individual underwriting

Producer behavioral differences:

DI 1318 5-14

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 occur

• Life insurance schedules

• Classed plans

DI 1318 5-14

For Producer use only. Not for use with clients.

opening doors

• Open doors lead to census data

• Census data leads to effective plan design

• Effective plan design leads to sold cases

DI 1318 5-14

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 group LTD or individual DI insurance – rather, it is 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 5-14

questions?

For Producer use only. Not for use with clients.DI 1318 5-14

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 5-14