Tuesday, June 11, 2013

Small Policies Can Equal Big Savings for Female Business Owners

I am sure that you have noticed that premiums for disability insurance are much higher for women than they are for men.  Here is an easy way to lower these premiums for female business owners.

Have her buy coverage on other employees. When she buys a DI policy for at least 2 other employees, it creates a multi-life case. This means that she will not only receive a premium discount of anywhere from 15 to 20 percent, she will also receive unisex rates with many carriers. The combination of the two could easily save her 50% off of her standalone rate. This savings will more than pay for the other 2 policies she is paying for.
And, it creates an opportunity for you to sell additional premium. How? Most likely, the owner is not going to buy "Cadillac" policies on the two employees. Just very basic, low-cost coverage. You then have the opportunity to talk to the other employees about purchasing additional coverage on a voluntary basis. Emphasize that not only is the employer paying for their basic coverage, but it gives them the ability to purchase the additional coverage at a highly discounted rate.

Wednesday, May 15, 2013

Case Study: Covering Executive Travel

While most people know us for Disability and Long-Term Care insurance, we do field many calls from brokers who start out by saying, "I don't think this is possible, but...".  I love getting calls like this. Helping a broker handle a difficult or extremely unique situation is so much fun.  This is a brief study of one recent case that crossed my desk.

A large business was having a corporate retreat. All 300+ of their top executives were attending the event. What happens if 1 or more of the planes being chartered crashes? What type of financial impact would that have on the company?  This group wanted to cover this risk, but time was of the essence. The didn't decide to do this until the morning they were flying out.  Impossible?

We were able to issue a group AD&D policy instantly for $1million of coverage per executive up to $50million per plane.  They were given a policy statement showing they were covered immediately and throughout the duration of their retreat. They even had 10 days to mail the premium check to the company.

Fortunately, the entire group returned home safely. But if they hadn't, the company had peace of mind knowing that they were protected.

Most of you will not come across cases like this on a frequent basis. However, there is a good concept that has come out of this. Covering key employees while they travel for business. It doesn't have to be 300. It can be 1.  Whether it is a private flight or commercial; domestic or international...We Can Help!

Tuesday, June 5, 2012

Is Your Client's BuySell Coverage Losing Value?

Are you one of those rare agents who has actually funded your client's BuySell agreement with insurance in case a disability occurs?  If so, take a moment to pat yourself on the back. Now pull out that policy and read the fine print.  You will most likely see language similar to this: "After age 61, the maximum benefit payable is reduced by 20% each year up to age 65 and will provide no benefits after age 65."

How many of your business owner clients are approaching or already in their 60s?  More and more clients are working well into their 60s.  This goes for business owners as well. They need to be informed about the diminished benefits they will receive from their Disability BuySell Insurance as they get older.

How can we help compensate for these decreasing benefits?  Offer your clients BuySell+.  A special Disability BuySell policy that increases by 20% each year from age 61 until age 65.  This will effectively offset the decreasing benefits of their traditional BuySell policy. Need more information or a quote?


Wednesday, April 18, 2012

LTC Insurance...Is the ride over??

With Prudential's recent exit from the market, I am getting constant questions about the future of the industry. Why should I sell this? Is it viable? Who is left? All are valid questions. Let's break down how we got to this point and then discuss where we go from here.

Long-term care, like all other insurances, is priced based on a number of assumptions. How many people will keep the coverage; how many will use the coverage; how long will they use it, etc. When insurers priced LTC insurance, they got pretty much every assumption wrong. Less than 1% of insureds lapse their policies. There are many more claims than they were expecting. Claims are lasting longer and are more expensive than they ever anticipated. You add all of this up and combine it with the fact we are in an unprecedented period of low interest rates; you get THE PERFECT STORM.

So what do we do? Do we pack it up and call it a day? We as agents and brokers exist to serve our clients. To protect them from the potential financial risks they face in life. As long as there is a need for long-term care in this country; we need to find ways to protect our clients from the high costs associated with that care.

Here is how:

1. LTC Alternatives
Many new products have been developed for those who do not like traditional LTC insurance. Special life insurance contracts and annuities are great funding methods. And now that there are "hybrid" products that don't require a Lump Sum premium, the market for these products will grow at even a faster rate.

2. Change in Policy Design & Structure
The simple fact of the matter is that if traditional LTC carriers don't change the way their policies are structured, they can't survive. Provisions like 5% Compound, Lifetime Benefits, and 100% coverage are unsustainable. A fundamental change in policy design is a must.

3. Agents & Planners Must Buy In
The last time a company came out with a different, more feasible policy design, many "LTC purists" refused to sell the product. We have to understand why companies are making design changes and support them.

The bottom line is this: The need is there. Insurance companies are going to have to make changes in order to remain viable and cover this need. It is up to us to accept these changes and continue to keep working with our clients to help insure them against the costs associated with long-term care. If we don't, the industry is gone and our clients are left with one remaining option: self-insuring.

Monday, March 12, 2012

Top Reasons to Sell Disability Insurance

1. IDI is a great door opener:
- Relatively few have it, but it's much needed protection.
- Not many have been approached about it.
- Since almost all individuals depend on their incomes, they can easily see the direct benefit of the insurance.

2. If your clients become disabled, Individual Disability Income (DI) Insurance provides monthly benefits to help pay for daily living expenses, including premiums on other insurance and investments they have with you.

3. IDI can diversify your portfolio offering and provide attractive compensation, including generous first-year commissions, strong renewal compensation, and opportunities to earn bonuses.

4. Offering disability insurance to clients is part of your due diligence. Suppose you help a client with other financial needs, but not income protection. What do you say to the client and his or her family if that person becomes too sick or hurt to work and is no longer receiving a paycheck? You don't want to be in a position where you have to admit there was a gap in the financial strategy you developed together.

5. Disability solutions are available for clients in sought-after markets, such as business owners and higher-income earning individuals.

Wednesday, February 29, 2012

Is Group LTD Enough?

Your financial future may not be as secure as you think. Although group long-term disability insurance – provided as a benefit by employers to employees – can provide a great foundation for protecting income from the financial setbacks of a disability, it may not be enough.

Typical group policies cover just 60 percent of gross income (often not including bonuses or commissions), and benefits are usually taxable. This translates into an approximate “pay cut” of 40 percent after taxes. This would not be enough to sustain the average person’s lifestyle in the event of a long-term disability.

Just as it’s important to supplement employer-provided life insurance with additional coverage, most financial experts also recommend individual disability income (DI) insurance as part of a sound financial plan. After all, your odds of becoming disabled are higher than you may think.

Individual DI insurance can help protect your hard-earned savings – and your family’s financial future – from a financial catastrophe. If you were to become disabled, the individual DI policy would pay benefits in addition to any disability benefits you may receive from your employer. And, when you buy individual disability coverage with after-tax dollars, the benefit payments are tax-free.

Tuesday, February 21, 2012

How To Pay Less For Long-Term Care Insurance

You can pay $700 annually for a quality long-term care insurance policy. You can also pay $7,000 a year. A significant number of individuals today pay between $15 and $20 a week for this protection. That's a highly affordable way to protect $150,000 to $250,000 of future care. Some 200,000 new LTC insurance buyers who purchased coverage over the past year were studied by the American Association for Long-Term Care Insurance, the national trade organization. Among buyers under age 61, over one-fourth(27.8%) paid less than $999 per year.

Here are 5 tips that can help individuals significantly reduce the cost of insurance coverage:

1. Leverage Your Good Health: Insurers require that you meet certain health qualifications to obtain coverage. Discounts are provided to those in good health and 62% of applicants between ages 40-49 qualified. The percentage drops to 46% for ages 50-59 and only 38% for ages 60-69.

2. Mind Your Birthday: Rates for this insurance are age-based and priced to remain level. Costs will increase each year you wait to apply, generally about 8% annually for each year you delay.

3. Right-Size Your Coverage: Some long-term care insurance is always better than none. Factor in other sources of income such as Social Security, pension and 401K plans that can pay costs.

4. Buy As A Couple: Most insurers offer significant discounts when a couple buys coverage together. As high as 30%. Buying as a couple will also allow you to add cost-saving options like Shared Care that allows two spouses to share a common benefit period.

5. Compare Coverage: Each insurer establishes it's own rates, health standards and available discounts. As a result, virtually equal protection from two highly-rated insurers can vary by between 30 and 80 percent.