Product Product Provisions Provisions Source Brokerage, Inc.
Dec 30, 2015
Choosing a DI ProductChoosing a DI ProductChoosing a DI ProductChoosing a DI Product
Strong company
Flexible plan
Competitive price
Three Occupation DefinitionsThree Occupation DefinitionsThree Occupation DefinitionsThree Occupation Definitions
OWN OCCUPATION– Unable to engage in “own” occupation. (“True” own occ)
OWN OCCUPATION & NOT ENGAGED – Unable to engage in “own” occupation and not engaged in any occupation for wage or profit. (Modified definition of disability)
REASONABLE OCCUPATION – Unable to engage in any occupation based on education, training or experience.
Non-can and Guaranteed Renewable
Guaranteed Renewable
Conditionally Renewable for Life
Basic Policy ProvisionsBasic Policy ProvisionsBasic Policy ProvisionsBasic Policy Provisions
Premiums waived after 90 days
180-day break in waiting period
Surgical transplant
Rehabilitation benefits in addition to monthly DI benefit
Specific or Presumptive Loss
Basic Policy ProvisionsBasic Policy ProvisionsBasic Policy ProvisionsBasic Policy Provisions
Reasonable OccupationReasonable Occupation 24 Months24 Months Own Occ &Own Occ & Not EngagedNot Engaged
24 Months 24 Months Own OccOwn Occ
Reasonable OccupationReasonable Occupation
Plan FlexibilityPlan FlexibilityPlan FlexibilityPlan Flexibility
60 Months Own Occ 60 Months Own Occ & Not Engaged& Not Engaged
Reasonable OccupationReasonable Occupation
6060 MonthsMonths Own OccOwn Occ Reasonable OccupationReasonable Occupation
To Age 65 Own Occ (Pure or True)To Age 65 Own Occ (Pure or True)
To Age 65 Own Occ & Not Engaged (Modified)To Age 65 Own Occ & Not Engaged (Modified)
DI JeopardyDI JeopardyDI JeopardyDI Jeopardy
How long does the average disability last?
What is the most economical elimination period for professional occupations?
Which definition of disability enables the policyholder to collect disability benefits while he/she is engaged in another gainful occupation?
Residual/Partial
24-Month Residual/Partial
6-Month Residual/Partial
Residual & Partial RidersResidual & Partial Riders
Full BenefitFull Benefit Proportional BenefitProportional Benefit NoNo BenefitBenefit
0%-20%0%-20% 20% - 80%20% - 80% 80% - 100%80% - 100%
Long-Term & 24-Month Long-Term & 24-Month Residual RidersResidual Riders
Long-Term & 24-Month Long-Term & 24-Month Residual RidersResidual Riders
20% loss of prior monthly earnings
Unable to perform one or more of the material and substantial duties of your occupation; or
Unable to engage in your occupation for 80% of the time, as was usual prior to the start of your disability.
Inflation RiderInflation RiderInflation RiderInflation Rider
Increases benefit while policyholder is
disabled and collecting benefit
CPI-U linked
Up to 6% compounded
Social Insurance Social Insurance Substitute RiderSubstitute Rider
(SISR)(SISR)
Social Insurance Social Insurance Substitute RiderSubstitute Rider
(SISR)(SISR)
Integrate With Social SecurityIntegrate With Social SecurityIntegrate With Social SecurityIntegrate With Social Security
Purpose: Lowers monthly premium
• Client eligible for $5,000 monthly benefit
• Base Benefit = $4,000
• SSI Benefit = $1,000
SISR Benefit PaymentSISR Benefit PaymentSISR Benefit PaymentSISR Benefit Payment
Claim Example 1
Maximum Benefit = $5,000
SS pays $1,000
Base Benefit pays $4,000
Total Monthly Benefit $5,000
$-for-$ offset$-for-$ offset
SISR Benefit PaymentsSISR Benefit PaymentsSISR Benefit PaymentsSISR Benefit Payments
Example 2
Maximum Monthly Benefit $5,000
SS pays None
Base Benefit = $5,000
Total Monthly Benefit = $5,000
AIRAIRAIRAIR
Increases benefit while policyholder is
working
3% annual increase for 5 years
No financial or medical evidence required
Additional 5-year benefit option available
with proof of insurability
Guaranteed Physical Guaranteed Physical Insurability Rider (GPIR)Insurability Rider (GPIR)
or Future Purchase Option or Future Purchase Option (FPO)(FPO)
Guaranteed Physical Guaranteed Physical Insurability Rider (GPIR)Insurability Rider (GPIR)
or Future Purchase Option or Future Purchase Option (FPO)(FPO)
GPIR or FPO GPIR or FPO GPIR or FPO GPIR or FPO
No medical evidence required when exercising increases
Must provide financial verification for increased benefit such as W-2, pay stub or tax return
DI JeopardyDI JeopardyDI JeopardyDI Jeopardy
• In what instances will a person be eligible for Social Security disability benefits?
• Which rider increases the monthly benefit if the policyholder is working?
• What is the window of time a disability can reoccur without requiring the claimant to satisfy a second elimination period?
Incarceration
War or act of war
Undisclosed pre-existing conditions
Intentional self-inflicted injury or sickness
24-Month Drug, Alcohol, Mental and Nervous Endorsement, unless hospital confined
Exclusions/LimitationsExclusions/LimitationsExclusions/LimitationsExclusions/Limitations
Competitive Premium FeaturesCompetitive Premium FeaturesCompetitive Premium FeaturesCompetitive Premium Features
Competitive Premium FeaturesCompetitive Premium FeaturesCompetitive Premium FeaturesCompetitive Premium Features
25% Tobacco Differential
15% - 20% Multi-Life Discount
15% Association Discount
Unisex and Sex-Distinct Rates
DI JeopardyDI JeopardyDI JeopardyDI Jeopardy
Are DI premiums more expensive for men or women?
What affect does the SSI rider have on the DI premium?
What is the most common reason people give for not purchasing a disability income policy?
Business Protection PlansBusiness Protection PlansBusiness Protection PlansBusiness Protection Plans
Business Overhead Expense- coversBusiness Overhead Expense- coversoverhead expenses while owner is overhead expenses while owner is
disabled, if there is a loss of income.disabled, if there is a loss of income.Buy/Sell- if one owner becomes disabled,Buy/Sell- if one owner becomes disabled,
buys out the partnership for the other buys out the partnership for the other owner/ownersowner/owners
Business Overhead ExpenseBusiness Overhead ExpenseBusiness Overhead ExpenseBusiness Overhead Expense
Expenses Covered:• Employees’ salaries• Utilities• Rent• Salary for business owner’s temporary
replacement (usually 6 months)• Interest payments on business debt
Business Overhead ExpenseBusiness Overhead ExpenseBusiness Overhead ExpenseBusiness Overhead Expense
Expenses not covered:
• Policy-owner’s salary
• Renovations to office or expansions of the business during disability
DI JeopardyDI JeopardyDI JeopardyDI Jeopardy
What is a good rule of thumb to determine if an expense is covered under Business Overhead Expense (BOE) policy?
What is the longest benefit period available in a Business Overhead Expense (BOE) policy?
Multi-Life DI PlansMulti-Life DI PlansMulti-Life DI PlansMulti-Life DI Plans
Guaranteed Standard Issue (No Medical Underwriting) with premium discounts for employer-paid and voluntary benefit programs.
Benefits for ClientBenefits for ClientBenefits for ClientBenefits for Client
• Supplements LTD benefits with individual plan to insure 90% of the net
income.
• Unisex rates
• No medical underwriting
Benefits for ProducerBenefits for ProducerBenefits for ProducerBenefits for Producer
• Build upon existing LTD programs
• Simplified underwriting and application process. – Census– No medical underwriting
Maximum Issue LimitsMaximum Issue LimitsMaximum Issue LimitsMaximum Issue Limits
Varies based on the number of participants. Some carriers will offer plans on GSI basis for as few as 5 executives and up.