Who Is Fortify
• Specialists in Income Protection and
Disability Insurance for Business
Continuation
• Founded in 2008
• Licensed in all US states
• 100% Brokerage General Agency
• We are Underwriters & Advocates
What Carriers Do You Have Access To?
What You Will Learn Today
1. Why you should recommend Individual
Disability Income (IDI) protection
2. Understanding the Risks
3. Common Causes of Disabilities
4. What are we protecting?
5. How to start the conversation
6. Understanding common objections
7. Sales ideas
Top Reasons to Sell IDI
1
It’s a great door opener … and relationship builder!
2
Upon a disability, it helps clients pay daily living
expenses and bills, including premiums on other
insurance products they have with you.
3
It helps diversify your portfolio offering and
protect relationships … + attractive compensation.
4
It’s part of a Financial Planner’s due diligence.
5
Solutions are available in sought-after
markets (e.g., business owners and
higher-income individuals)
Why Protect Income?
The need for income protection
During the course of your career, you are three and a half
times more likely to be injured and need disability coverage
than you are to die and need life insurance.1
Approximately 30 percent of people aged 35 to 65 will suffer a
disability for at least 90 days. 2
48% of all home foreclosures are due to serious medical
problems.3
1 - Health Insurance Association of America, 2000
2 - Health Insurance Association of America, The New York Times, Feb. 2000
3 - National Underwriter, May 2002
Mortality …
People are living longer.
80%
40
0
-27%
-29%
-32%
-48%
-40
-73%
-80
Hypertension
Cardiovascular
Heart Disease
All Four
Diabetes
Source: National Underwriter, May 2002; The JHA Disability Fact Book – 2003/2004 Edition – Need for Disability Insurance
Vs. Morbidity
But we are also disabled longer.
80%
+70%
40
+44%
+55%
+36%
+36%
0
-27%
-29%
-32%
-48%
-40
-73%
-80
Hypertension
Cardiovascular
Heart Disease
All Four
Diabetes
Source: National Underwriter, May 2002; The JHA Disability Fact Book – 2003/2004 Edition – Need for Disability Insurance
Average Length of
Long-Term Disability Carrier Claim
Condition
Fibromyalgia
Mental Disorders
Length of Claim
100 months
99 months
Aids/HIV
Cancer
Circulatory Disease
98 months
81 months
76 months
Nervous System Disease
Injury
Respiratory Disease
69 months
64 months
45 months
JHA 2004 Disability Rate Study & Risk Management Survey (74%
Market Share)
How Disability Happens
Source: Principal Life Disability insurance claims incurred as of March 2009. The
above is for illustration purposes only and is not intended as an inclusive
representation of all claims.
* Source: Principal Life Disability Insurance claims incurred as of March 2007. The
above is for illustration purposes only and is not intended as an inclusive
representation of all claims.
The Income Protection
Conversation
• It’s up to you to talk about income protection.
If you don’t, someone else will.
Market
potential
Compensation
potential
1
67% of the private sector workforce has no
long-term disability insurance.1
Nearly 50% of those who look into income
protection, after being approached about it,
buy some type of policy. 2
Producers who take a comprehensive approach
with clients earn 30% more than those
who do not.3
Social Security Administration, Fact Sheet, March 2011
MarketFacts Quarterly, 2012.
3 2010 Principal Life Insurance Company retail sales data
2 LIMRA
Protecting The Most Valuable Asset
Potential Earnings to Age 65*
Age
Annual Income
$50,000
$100,000
$150,000
30
$3,023,104
$6,046,208
$9,069,312
35
$2,378,771
$4,757,542
$7,136,312
40
$1,822,963
$3,645,926
$5,468,890
45
$1,343,519
$2,687,037
$4,030,556
*Assumes 3% annual salary increase
What Does Income Protection Provide?
• Security
• Comfort
• Peace of mind
Starting the Conversation
• What would happen if you became too sick or hurt
to work?
What’s your plan?
• What is your most valuable asset? Do you realize
what your potential earnings are to retirement?
• When was the last time you reviewed
your Income Protection plan?
• Who pays your bills today? Who would if you
became too sick or hurt to work?
• What other things do you insure?
How do you pay for that insurance?
How would you pay for that insurance
without an income?
Most Common Objections
I Can’t Afford It
•
•
•
•
Premium coffee a day
Date night
Lunch every day
Smart phone
Why Do I Need • Illnesses, not accidents
• Sharing a real story
It?
• Divide your income in half
I’d Never Use It
• Life insurance
• Auto insurance
• Home insurance
www.principal.com/incomeprotection
Sales Pieces to Share with
Clients
• Tools available that cover the top three
objections:
“I won’t need it – I
won’t get disabled”
“I can’t afford it” or
“It’s not worth it.”
“I have other coverage
so I’m protected”
Which Job would you prefer?
JOB A
JOB B
Annual salary
Annual salary
$100,000
$98,600*
if working (before taxes)
if working (before taxes)
$0
Income while too sick or hurt to work
$60,000*
Income while too sick or hurt to work from your
DI insurance policy (after taxes)
• If you become too sick or hurt to work
tomorrow, which job would you rather have?
• Would you rely on co-workers to hold a fundraiser for you?
• Plan ahead with income protection.
*100,000 less $1,400 in hypothetical annual disability income insurance premiums. Premiums and
$5,000 monthly benefit amount depend on various factors. Your local representative can illustrate
the exact amount you’re eligible for based on current underwriting guidelines. This a hypothetical
example only.
Can you live on 42% of your income?
Is employer-provided group disability insurance enough?
Chart based on $5,000 gross monthly income ($60,000 annually), with
60% Group Long Term Disability program, assuming a 30% tax bracket
for Federal, State and FICA.
Group coverage is a great start,
but often not enough
For the cost of 2 to 6
pennies…
Full paycheck.
Healthy and working.
Group LTD benefits
before taxes
Group LTD benefits
after taxes
Individual DI insurance
can protect more of your
income
Use
?
“I’ll Never Use It”
2 – The Principal Financial Well-Being Index, First Quarter 2013. | 3 – Data from model year introduction 2008 through
July 2010, Highway Loss Data Institute. | 4 – Data from ISO, a Verisk Analytics Company. | 5 – Average premium for
2009, National Association of Insurance Commissioners. | 6 – Average premium among top Individual DI insurance
carriers (Principal, MetLife, Standard, Guardian and Ameritas) for $1,000/month benefit, 45 year-old male, Colorado
resident, non-smoker, $60,000 annual income, To age 65 benefit and Your Occupation periods, 90-day elimination
period, non-cancelable. | 7 – $30,000 is the total payout of a $1,000/month benefit policy claim that pays for 2 ½ years,
the average long-term disability claim length (2010 Gen Re Fact Book). | 8 – The policy offers the potential to pay
ongoing monthly benefits until the end of the benefit period; To age 65 or 67 benefit period is the most common
Q&A
Thank You!