plus group top hat di to the max
TRANSCRIPT
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And other Ways to“Show the Max!”
byThomas 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.
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Spending Patterns in the USA
U.S. News and World Report
– Nearly 40% of family budget = Mortgage
– 25% to 35% toward minor things: Food Clothing Bills
65% to 75% of income is consumed just to live!
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Spending Patterns in the USA
U.S. Bureau of Labor Statistics
– 73,000,000 people surveyed
– Survey indicated that 35% to 40% was allocated toward the mortgage.
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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%
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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.
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What is the typical percentage used to insure group disability?
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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
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% Income Issued by Most Carriers
100 75 70 60 50 40 30 20 0
75,000 150,000 300,000 500,000 1,000,000
The Need Line
If 65% is the agreed upon number, why does the primary markets limit the coverage?
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Excess Disability
Not limited to just Personal Disability!
– Buy-Sell– Business Overhead Expense– Key Person
What are the maximums from most carriers??
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1. Individual 2. Multi-Life 3. Group Excess4. Top Hat
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1) Uses: 1) Personal and Business Coverages2) Excess, Supplemental and Primary
2) Monthly Benefit Maximums1) 65% personally paid2) 75% corporate paid3) 5 x annual income for Lump Sum4) $$$ = Justification
3) Benefit Period Maximum1) 1 to 5 years for personal coverage or2) Lump Sum
4) Contract Period Maximum1) 5 years
5) Occupational Limits1) None
6) Underwriting Requirements1) Full
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1) Uses: 1) Personal Excess, Supplemental and
Primary
2) Monthly Benefit Maximums1) $50,000/month2) 65% of income
3) Benefit Period Maximum1) Up to 5 years for ages 18-592) Up to 3 years for ages 60+
4) Contract Period Maximum1) 3 years for ages 18 to 592) 1 year 60+
5) Occupational Limits1) None
6) Underwriting Requirements1) 2 or more = Discount only2) 5 + applicants = discount and
application and CFS only
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1) Monthly Benefit Maximums1) $50,000/month2) 65% of income
2) Benefit Period Maximum1) Up to 5 years for ages 18-592) Up to 3 years for ages 60+
3) Contract Period Maximum1) 3 years for ages 18 to 592) 1 year 60+
4) Participation and Size1) 100% and 10 minimum
5) Underwriting Requirements1) Up to 50 lives - 3 years of group
experience2) 51 to 99 lives – 2 year group
experience3) 100+ - 1 year of group experience4) Pre-ex clause in effect
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1) Monthly Benefit Maximums1) $50,000/month2) 65% of income
2) Benefit Period Maximum1) Up to 5 years for ages 18-592) Up to 3 years for ages 60+
3) Contract Period Maximum1) 3 years for ages 18 to 592) 1 year 60+
4) Minimum Participation and Size
1) 5
5) Underwriting Requirements1) 2 years of group experience or short
form app on eligible employees1) Pre-ex clause in effect
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Standard Benefits Own Occupation Presumptive Recurrent
Options Residual COLA Automatic Benefit Increase
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1) Monthly Benefit Maximums1) $10,000/month2) 65% of income
2) Benefit Period Maximum1) 2 year and 5 year
3) Contract Period Maximum1) 3 years
4) Underwriting Requirement1) Signed and dated Top Hat application
and authorization2) Copy of non-can DI policy issued
within last 90 days
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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
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Individual Underwriting Multi-life
Discounts Underwriting considerations
Group Excess Guaranteed issue Guaranteed-to issue (simplified issue)
Top Hat Automatic issue
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And other Ways to“Show the Max!”
byThomas 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.