own occupation & not engaged

Source Brokerage, Inc.
Choosing a DI Product
 Strong company
 Flexible plan
 Competitive price
Three Occupation Definitions
Unable to engage in “own” occupation. (“True” own occ)
Unable to engage in “own” occupation and not
engaged in any occupation for wage or profit.
(Modified definition of disability)
OCCUPATION – Unable to engage
in any occupation based on education, training or
Basic Policy Provisions
Basic Policy Provisions
 Non-can and Guaranteed Renewable
 Guaranteed Renewable
 Conditionally Renewable for Life
Basic 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
Plan Flexibility
To Age 65 Own Occ (Pure or True)
To Age 65 Own Occ & Not Engaged (Modified)
60 Months Own Occ
Reasonable Occupation
60 Months Own Occ
& Not Engaged
Reasonable Occupation
24 Months
Own Occ
24 Months
Own Occ &
Not Engaged
Reasonable Occupation
Reasonable Occupation
DI 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
Residual & Partial Riders
 Residual/Partial
 24-Month Residual/Partial
 6-Month Residual/Partial
Full Benefit
Proportional Benefit
20% - 80%
No Benefit
80% - 100%
Long-Term & 24-Month
Residual 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 Rider
Inflation Rider
 Increases benefit while policyholder is
disabled and collecting benefit
 CPI-U linked
 Up to 6% compounded
Social Insurance
Substitute Rider
Integrate With Social Security
Purpose: Lowers monthly premium
• Client eligible for $5,000 monthly benefit
• Base Benefit = $4,000
• SSI Benefit = $1,000
SISR Benefit Payment
$-for-$ offset
Claim Example 1
Maximum Benefit = $5,000
SS pays $1,000
Base Benefit pays $4,000
Total Monthly Benefit $5,000
SISR Benefit Payments
Example 2
Maximum Monthly Benefit $5,000
SS pays None
Base Benefit = $5,000
Total Monthly Benefit = $5,000
Automatic Increase Rider
Increases benefit while policyholder is
 3% annual increase for 5 years
 No financial or medical evidence required
 Additional 5-year benefit option available
with proof of insurability
Guaranteed Physical
Insurability Rider (GPIR)
or Future Purchase Option
 No medical evidence required when
exercising increases
 Must provide financial verification for
increased benefit such as W-2, pay stub
or tax return
DI 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?
Exclusion Limitations
 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
Competitive Premium Features
Competitive Premium Features
 25% Tobacco Differential
 15% - 20% Multi-Life Discount
 15% Association Discount
 Unisex and Sex-Distinct Rates
DI Jeopardy
Are DI premiums more expensive for men or
What affect does the SSI rider have on the DI
What is the most common reason people give
for not purchasing a disability income policy?
Business Protection Plans
Business Overhead Expense- covers
overhead expenses while owner is
disabled, if there is a loss of income.
Buy/Sell- if one owner becomes disabled,
buys out the partnership for the other
Business 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 Expense
Expenses not covered:
• Policy-owner’s salary
• Renovations to office or expansions of
the business during disability
DI 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 Plans
Guaranteed Standard Issue (No Medical
Underwriting) with premium discounts
for employer-paid and voluntary benefit
Benefits for Client
• Supplements LTD benefits with
individual plan to insure 90% of the net
• Unisex rates
• No medical underwriting
Benefits for Producer
• Build upon existing LTD programs
• Simplified underwriting and application
– Census
– No medical underwriting
Maximum 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.
Take a Break
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