Selling Individual Disability
Insurance to Small Business Owners
For
producer use
SI 12645PPT
(Revonly.
6/15)Not for use with consumers or in New York.
Market Profile
Small businesses are key to the
nation’s well-being. They account for
a significant share of the U.S.
economic production.
At last measurement, this U.S. market
segment was represented by more
than 28 million small businesses.*
*Small Business Association Office of Advocacy.
Frequently Asked Question. September, 2012.
SI 12645PPT (Rev 6/15)
The Need For Disability
Insurance
SI 12645PPT (Rev 6/15)
The Protector SeriesSM
Individual disability
insurance
The disability insurance* The Standard
offers to business owners is:
• Protector PlatinumSM, Protector+SM and
Protector EssentialSM Individual
Disability Income Insurance
• Business Overhead ProtectorSM
Disability Insurance
• Business Equity ProtectorSM Individual
Buy/Sell Funding Insurance
* To see which products are available for sale in your state, please
see the The Protector Series States Availability List.
SI 12645PPT (Rev 6/15)
Individual Disability
Income Insurance
Provides a monthly income flow that
helps offset the income loss in the
event an insured experiences a
disabling illness or accident and is
unable to generate his or her
predisability earned income.
SI 12645PPT (Rev 6/15)
Individual Disability
Income Insurance For
Employees
When a business has several
employees, consider offering
voluntary individual disability income
insurance.
It may be available at a discounted
rate, on a multi-life or guarantee
issue basis.*
* Except Protector Essential which is not available at
xdiscounted rates.
* The Protector in California
SI 12645PPT (Rev 6/15)
Business Overhead
ProtectorSM Disability
Insurance
• Provides reimbursement of business
expenses while an owner is disabled
• Expenses covered include
•
•
•
•
•
•
•
•
employee salaries
employment taxes
rent
lease payments
utilities
business insurance premiums
property taxes
dues
SI 12645PPT (Rev 6/15)
Business Overhead
ProtectorSM Disability
Insurance
• Available for businesses with ten
employees or fewer.
• For occupation classes 3A, 4A, and
5A, Business Overhead Protector
includes a Salary Replacement Rider
at no additional cost. The Salary
Replacement Rider provides coverage
for the salary, fees and wages of an
individual hired to perform the disabled
owner’s work.
SI 12645PPT (Rev 6/15)
Business Equity
ProtectorSM Buy/Sell
Funding Insurance
For businesses with multiple owners,
buy/sell funding insurance provides a
source of funds for the purchase of an
owner's interest in the business if the
owner is required to sell due to disability.
This is important because even with a
buy/sell agreement in place, a disability
buy-out obligation can hit a business hard
if the necessary funds are not readily
available.
SI 12645PPT (Rev 6/15)
Business Equity
ProtectorSM Buy/Sell
Funding Insurance
This is especially true since the buy-out
obligation comes at a time when the
disabled business owner is no longer
able to contribute time or energy to the
success of the business.
Many businesses fail to provide for the
funding of established buy-out
agreements.
SI 12645PPT (Rev 6/15)
Business Equity
ProtectorSM Buy/Sell
Funding Insurance
Funding a buy-out obligation with
disability insurance serves dual
purposes. It provides
• a source of funds for the purchase
of a disabled owner’s interest in a
business
• a disabled owner with
compensation for his or
her equity in the business.
SI 12645PPT (Rev 6/15)
Business Owner Incentives
SI 12645PPT (Rev 6/15)
Business Owner
Rewards Program
The Standard recognizes that business
owners have special disability insurance
needs.
The Business Owner Rewards program
gives qualifying business owners access
to increased individual disability
insurance coverage while at the same
time enhancing benefits and often
reducing premium.
SI 12645PPT (Rev 6/15)
Business Owner Upgrade
• Upgrades the insured’s occupation class,
providing access to increased disability
insurance coverage while at the same
time enhancing benefits and often
reducing premiums.*
• The Business Owner Upgrade is
available with
• Protector+
• Business Overhead Protector
• Business Equity Protector
• Protector Platinum in Ohio.
• It is not available with Protector Essential.
*Upgrades are subject to final approval by an underwriter at
xThe Standard.
SI 12645PPT (Rev 6/15)
Business Owner Upgrade
With the Business Owner Upgrade come
the advantages higher occupation
classes offer.
These may include:
• Increased benefit amounts
• Extended benefit periods
• Additional optional benefit riders
• Reduced premiums
SI 12645PPT (Rev 6/15)
Business Owner Upgrade
Business Owners have the opportunity to
upgrade their occupation class when
they:
• own at least 20% of their business
and
• have been financially successful for at
least two years under the current
business arrangement, as supported
by appropriate business income
documentation.
SI 12645PPT (Rev 6/15)
Business Owner Upgrade
The Business Owner Upgrade is not
available to:
• medical or dental occupations (2P, 3P,
4P occupation classes),
• long haul truck drivers,
• those listed under Financial Services,
Real Estate, Entertainment Industry or
as “No” in the Occupation
Classifications section of The Protector
Series product guide.
SI 12645PPT (Rev 6/15)
More
Business Owner Rewards
New policy owners of the
Business Overhead Protector
• automatically receive an upgrade of
one occupation class in addition to
any increases under the Business
Owner Upgrade.
• 5A occupations receive a 10%
discount on gender-distinct rates.
• New business owners receive up to
$10,000 monthly benefit.
SI 12645PPT (Rev 6/15)
Newly Self Employed Business Owners
• Newly self-employed business owners with work experience in
the same professional capacity may be eligible for individual
disability income insurance coverage based on their historical
W-2 earnings.
• Insurable income is based on 75 percent of each individual’s
final, annual earnings rate as a non-owner employee in the same
profession as his or her new business. This is available to
occupation classes 5A, and 4A, as well as to 4P, 3P and 2P
physicians.
• Maximum individual disability income Issue & Participation Limit
is $10,000 for 5A and 4A occupation classes, and as published
for 4P, 3P and 2P physician occupation classes in The Protector
Series Product Guide.
SI 12645PPT (Rev 6/15)
Newly Self Employed
Business Owners
• Other occupation classes may also be
eligible with a maximum IDI Issue &
Participation of $1,000.
• The Standard reserves the right, on a
case-by-case basis, to request additional
financial information or modify its
underwriting approach.
• This program is not available to those
listed as “No” in the Occupation
Classification List in
The Protector Series Product Guide.
SI 12645PPT (Rev 6/15)
Newly Self Employed Business Owners
To be eligible the business owner:
• established a new business within the past 12 months
• is actively involved in the operation of the business
• is actively generating revenue at the time of underwriting
• has been employed in the same professional capacity for at least
three years as a non-owner employee immediately before
becoming an owner, earning at least $50,000 annually
• has provided documentation of two years’ prior income. Bonus
income may be included depending on occupation, bonus history,
and how the bonus was generated. Fluctuating income may be
averaged.
SI 12645PPT (Rev 6/15)
Earned Income
Enhancer
The Earned Income Enhancer is a
complement to the Business Owner
Rewards Program because sometimes
the amount of income earned may not
accurately reflect the amount of income
that needs to be protected.
It is available with Protector Platinum,
Protector+ and Protector Essential.
SI 12645PPT (Rev 6/15)
Earned Income
Enhancer
The Earned Income Enhancer allows
business owners to qualify for up to
$2,000 in additional coverage within
issue and participation limits than
non-business owners in the same
occupation class.
SI 12645PPT (Rev 6/15)
Earned Income
Enhancer
Business Owners must:
•
•
own at least 20% of the business
have been financially successful for at
least the last two years under the
current business arrangement, as
supported by appropriate business
income documentation.
SI 12645PPT (Rev 6/15)
Earned Income
Enhancer
• To determine the coverage available
with the Earned Income Enhancer, use
the calculation below:
Earned Income x 120%
• The amount of additional coverage
cannot be greater than $2,000 per
month and the total coverage must fall
within the occupation’s issue and
participation limits.
SI 12645PPT (Rev 6/15)
Earned Income
Enhancer
The Earned Income Enhance is not
available to
• podiatrists,
• long haul truck drivers,
• those listed under Real Estate,
Entertainment Industry or as “No” in the
Occupation Classifications List of The
Protector Series Product Guide.
SI 12645PPT (Rev 6/15)
Premium Discount Options
SI 12645PPT (Rev 6/15)
27
Premium Discounts
Premium discounts are provided to help
solicit multiple applicants.
The types of discounts available are for:
• Multi-Life Groups
• Business Owners
• Guarantee Issue Groups
Availability of discounts, and the number of lives required to
obtain a discount, may vary by state. The PPMD is available to
government employees; others are not. No discounts are
available with Protector Essential. Please see the online
reference Protector Series Product Guide, form 9251REF
SI/SNY
* The Protector in California
SI 12645PPT (Rev 6/15)
Preferred Producer
Multi-Life Discount
• A 10% Multi-Life Discount for Preferred
Producers is awarded to producers
who have placed The Standard’s
individual disability insurance policies
for five* or more unique individuals.
• Please see the Preferred Producer
Multi-Life Discount Guidelines, form
17056 for details.
* Seven if placed by a sales team pair that splits commission 50/50.
SI 12645PPT (Rev 6/15)
Premium Discounts for
Employer-Based Multi-Life Groups1
• Employer-Based Multi-Life groups are generally defined as five or
more lives employed by the same employer.
• Employer-Based Multi-Life groups can be as few as two lives so
long as those participating
• Are each at least 20% owners of the same business
• Purchase policies with combined pre-discounted annual
premium of at least $5,0002
• Meet all other provisions related to timing of the
Employer-Based Multi-Life discount
1. Availability of discounts, and the number of lives required to obtain a discount, may vary by state.
Please see the Multi-Life Discounts State Availability Chart.
2. Or less, if both purchase the maximum benefit on both policies.
SI 12645PPT (Rev 6/15)
Business Owner Discount
The Business Owner Discount provides 15% savings on
gender-distinct rates to qualifying business owners with
Protector Platinum policies.1
Qualifying2 business owners
• own at least 20% of their business
and
• have been financially successful for at least two years
under the current business arrangement as supported
by the appropriate business income documentation
1. Except in Ohio, where the Business Owner Upgrade is available.
2. Not available to medical or dental occupations, (2P, 3P, 4P occupation classes), long haul truck drivers,
or those listed under Financial Services, Real Estate, Entertainment Industry or as “No” in the occupations
listing in The Protector Series Product Guide, form 9251REF SI/SNY
SI 12645PPT (Rev 6/15)
Multi-Product Discount
When Protector Platinum is sold in
conjunction with Business Overhead
Protector disability insurance and/or
Business Equity Protector disability
buy-sell funding insurance, a 5%
discount is applied to the Protector
Platinum premium.
SI 12645PPT (Rev 6/15)
Discount Options for
Protector Platinum
Guarantee Issue
Mandatory (Gender-Neutral)
• 30%, 35% Large Case Discount (100+
lives), or 40% when combined with 5%
Cross-Sale Discount with LTD from
The Standard
Voluntary (Gender-Neutral)
• 15% Goal Participation Met Discount, or
20% if combined with 5% Cross Sale
Discount with LTD from The Standard
Participation Goal varies by case
SI 12645PPT (Rev 6/15)
Guarantee Issue
Cross-Sale Discount
When sold in conjunction with
The Standard’s Long Term Disability
group insurance, a 5% premium
discount is applied to Protector
Platinum Guarantee Issue individual
disability insurance from
The Standard.
SI 12645PPT (Rev 6/15)
Benefit Amounts for Guarantee Issue
• Benefits may be tax-free
Depending on case profile, the following tables illustrate
the monthly benefit amounts that may be offered.
• Incentive pay can be covered
Voluntary
• Policies are portable and
individually owned
• There is no offset for
Supplemental Social Security
or Workers’ Compensation
benefits
Mandatory
Availability of discounts, and the number of lives
required to obtain a discount, may vary by state.
Please see the online Protector Series Reference
Product Guide, form 9251REF SI/SNY.
SI 12645PPT (Rev 6/15)
Summary of Protector Platinum
Premium Discount Options for
Regularly Underwritten DI
Multi-Life Discounts (gender-distinct)
Employer-Based Multi-Life Discount
Preferred Producer Multi-Life Discount
10% Discount
Business Owner Discount
Gender-Distinct Pricing
15% Discount
Multi-Product Discount
Gender-Distinct Pricing
SI 12645PPT (Rev 6/15)
5% Discount
Summary of
Business Overhead Protector
Premium Discount Options
Multi-Life Discounts
Employer-Based Multi-Life Discount
Preferred Producer Multi-Life Discount
SI 12645PPT (Rev 6/15)
Gender-Distinct
10% Discount
Summary of Protector Platinum
Premium Discounts for Guarantee Issue
Guarantee Issue Discount
Voluntary
Gender-Neutral Pricing 15% goal1 discount
20% if participation
exceeds goal.
Mandatory
Gender-Neutral Pricing 30% discount
35% large case
discount (100+ lives)
Guarantee Issue Cross-Sale Discount
Gender-Neutral Pricing 5% Discount
1. Goal varies by case.
SI 12645PPT (Rev 6/15)
The Standard
• Keeping its promises to its customers
since 1906
• Ranks among the top ten disability
insurance companies in the nation
• Rates 1st among its peers with high
levels of customer service, a sound
liquidity position and strong financial
flexibility*
* Peer Comparison: U.S. Specialty Employee Benefit Insurers.
xStandard & Poor’s Rating services.
SI 12645PPT (Rev 6/15)
SI 12645PPT (Rev 6/15)