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Slide 1: Top Hat And other Ways to “Show the Max!” by Thomas Petersen, MBA, RHU Petersen International Underwriters Please contact your local Plus Group office for more information. Go to www.plusgroupus.com and click on the agency locator map to find an office near you or call 800/831-1018.
Slide 2: How Much Disability Coverage is Enough?
Slide 3: Spending Patterns in the USA n U.S. News and World Report – Nearly 40% of family budget = Mortgage – 25% to 35% toward minor things: l Food l Clothing l Bills 65% to 75% of income is consumed just to live!
Slide 4: Spending Patterns in the USA n U.S. Bureau of Labor Statistics – 73,000,000 people surveyed – Survey indicated that 35% to 40% was allocated toward the mortgage.
Slide 5: What our Industry says is needed Disability Income Insurance: The Unique Risk As high as 80% down to as low as 50% to 60% Essentials of Disability Income Insurance As low as 58%
Slide 6: Underwriting in Life and Health Insurance Companies “Most companies limit the maximum amount of disability income coverage available to 75 or 80 percent of the insureds net income” Principals of Health and Disability Insurance Discussing maximum benefits – “A person earning $2,000 a month may be limited by Company A to a monthly benefit of $1,200, representing 60% of regular income.
Slide 7: If That Isn't Enough What is the typical percentage used to insure group disability?
Slide 8: So Let's Review the Need Various 3rd party surveys – 65% to 75% Various Industry experts – 50% to 80% LUTC RHU LOMA The American College Traditional Group Disability – 60% or 2/3
Slide 9: % Income Issued by Most Carriers If 65% is the agreed upon number, why does the primary markets limit the coverage? 100 75 70 The Need Line 60 50 40 30 20 0 75,000 150,000 300,000 500,000 1,000,000
Slide 10: Excess Disability n Not limited to just Personal Disability! – Buy-Sell – Business Overhead Expense – Key Person What are the maximums from most carriers??
Slide 11: So How Do We Add Excess Disability Coverage?
Slide 12: 4 Ways to Add Excess 1. Individual 2. Multi-Life 3. Group Excess 4. Top Hat
Slide 13: Individual Coverages 1) Uses: 1) Personal and Business Coverages 2) Excess, Supplemental and Primary 2) Monthly Benefit Maximums 1) 65% personally paid 2) 75% corporate paid 3) 5 x annual income for Lump Sum 4) $$$ = Justification 3) Benefit Period Maximum 1) 1 to 5 years for personal coverage or 2) Lump Sum 4) Contract Period Maximum 1) 5 years 5) Occupational Limits 1) None 6) Underwriting Requirements 1) Full
Slide 14: Multi-Life Excess Disability 1) Uses: 1) Personal Excess, Supplemental and Primary 2) Monthly Benefit Maximums 1) $50,000/month 2) 65% of income 3) Benefit Period Maximum 1) Up to 5 years for ages 18-59 2) Up to 3 years for ages 60+ 4) Contract Period Maximum 1) 3 years for ages 18 to 59 2) 1 year 60+ 5) Occupational Limits 1) None 6) Underwriting Requirements 1) 2 or more = Discount only 2) 5 + applicants = discount and application and CFS only
Slide 15: Group Excess Disability Guaranteed Issue 1) Monthly Benefit Maximums 1) $50,000/month 2) 65% of income 2) Benefit Period Maximum 1) Up to 5 years for ages 18-59 2) Up to 3 years for ages 60+ 3) Contract Period Maximum 1) 3 years for ages 18 to 59 2) 1 year 60+ 4) Participation and Size 1) 100% and 10 minimum 5) Underwriting Requirements 1) Up to 50 lives - 3 years of group experience 2) 51 to 99 lives – 2 year group experience 3) 100+ - 1 year of group experience 4) Pre-ex clause in effect
Slide 16: Group Excess Disability Simplified Issue 1) Monthly Benefit Maximums 1) $50,000/month 2) 65% of income 2) Benefit Period Maximum 1) Up to 5 years for ages 18-59 2) Up to 3 years for ages 60+ 3) Contract Period Maximum 1) 3 years for ages 18 to 59 2) 1 year 60+ 4) Minimum Participation and Size 1) 5 5) Underwriting Requirements 1) 2 years of group experience or short form app on eligible employees 1) Pre-ex clause in effect
Slide 17: Multi-Life and Group Standard Benefits Own Occupation Presumptive Recurrent Options Residual COLA Automatic Benefit Increase
Slide 18: Top Hat Automatic Issue 1) Monthly Benefit Maximums 1) $10,000/month 2) 65% of income 2) Benefit Period Maximum 1) 2 year and 5 year 3) Contract Period Maximum 1) 3 years 4) Underwriting Requirement 1) Signed and dated Top Hat application and authorization 2) Copy of non-can DI policy issued within last 90 days
Slide 19: Top Hat Automatic Issue Determine eligibility using the 65% solution (or the $150,000 trigger) Fax or e-mail a copy of the newly issued policy and its application PIU will prepare an offer and Top Hat application for you Deliver 2 policies at the same time! If the clients likes the added coverage, pick up a check and have your client sign the application
Slide 20: Multiple Accesses to Excess DI Individual Underwriting Multi-life Discounts Underwriting considerations Group Excess Guaranteed issue Guaranteed-to issue (simplified issue) Top Hat Automatic issue
Slide 21: Top Hat And other Ways to “Show the Max!” by Thomas Petersen, MBA, RHU Petersen International Underwriters Please contact your local Plus Group office for more information. Go to www.plusgroupus.com and click on the agency locator map to find an office near you or call 800/831-1018. |
