Don't Let a Disability Ruin Your Retirement Plan

Hopefully you have addressed the need for income protection with your clients. Disability insurance is the only way to ensure that your client's financial obligations are met if a disability were to occur during their working life.
Have you thought about the consequences a disability will have on their retirement plan?

A disability could disrupt their retirment savings plan in many ways:

• Contributions to Social Security would stop.


• Contributions to an employer-sponsored plan, such as a 401(k) would stop.


• Employer Matching would stop.


• Would their DI coverage be enough to allow them to continue to contribute to IRAs, etc.?

Fortunately, there is a way to ensure the ability to save for retirement in the event of a disability. Several insurance carriers offer a disability income insurance program that helps clients continue saving for retirement.

Upon a qualifying disability, this type of program would pay monthly benefits directly to a trust to help your client to continue to save for retirement. This trust then invests the benefits on your behalf. At a set age, you would start receiving income payments from the trust.

If your client is serious about saving for retirement and has maxed out their personal disability income insurance benefits, this type of program is ideal.

Tips for a Successful Voluntary Multi-Life DI Case

The individual disability income (DI) insurance industry has seen growth in the voluntary multi-life marketplace. It's an attractive market because it allows:

• Employers to maintain comprehensive and budget-friendly employee benefit packages to attract and retain employees


• Employees to purchase valuable coverage at a discount through a carrier their employer has endorsed-often with streamlined underwriting


• Producers to see increased referrals, increased cross-selling opportunities, and more commissions

To be successful, producers need to understand the customer, effectively communicate the offering and work with the employer to establish a plan and enrollment strategy that best meets the employer's needs.

Understand the customer--Employers are the "gatekeepers" to employees and a strong relationship with them can result in better support, access to employees and a stronger plan design. When meeting with employers, position yourself as an expert for employee benefits and ask questions that help you deepen your understanding of their workplace and objectives. The knowledge you gain helps you and the insurance carrier develop a plan design that meets employer and employee needs.

Communication--Putting benefit decisions in the hands of employees means more education and communication is needed. Most employers welcome assitance in helping employees understand the benefit offering. The best way to educate them and ensure a successful enrollment, is to use a variety of communication methods with messages that address their needs.

Establish a plan--Creating a customized plan design and determining the best way to communicate with employees takes time and coordination. Work with an insurance carrier or BGA that offers assitance, such as customized communication templates, employee enrollment packets, and enrollment help. Establish employer expectations by clearly defining your and their role regarding account set-up, enrollment communication, enrollment meetings, and policy delivery.

Following these tips when selling and enrolling a voluntary multi-life DI program can provide benefits for everyone-you, the employer and their employees.

For more tips or assitance with your next multi-life DI program, contact OneSource Brokerage.

Will New EVOLUTION LTC Product Revolutionize Industry?

A new product from Prudential offers to simply your client's decision process. With the introduction of Prudential LTC Evolution, now you can offer a long-term care insurance policy that's easier for you to present, and easier for you clients to buy.

Your clients only need to make one benefit decision: Policy Lifetime Maximum

Unlike other long-term care insurance policies that require your clients to think through multiple benefits decisions (regarding the desired daily benefit amount, the benefit duration and the reimbursement method) Prudential LTC Evolution takes a simpler approach:

Reimbursements are based on Actual Eligible Charges up to the Policy Lifetime Maximum selected by the policyholder.

As a result, your clients only need to consider one simple benefit decision when purchasing the coverage: "How much do I want as a Policy Lifetime Maximum?" They can choose any amount desired - from $100,000 to $1,000,000. No matter what amount is chosen, the Policy always pays:

• 80% of Actual Eligible Charges for covered long-term care services up to the Policy Lifetime Maximum selected by the client


• 100% of Actual Eligible Charges for covered home support services up to a built-in Policy limit of $10,000

This simple approach to policyholder reimbursements will feel familiar and comfortable to your clients since it works in a fashion similar to most health insurance plans. It also allows you to focus your client's attention on a key benefit - using the Policy as an asset protection tool.

Give OneSource a call for more details or an illustration.

LTC conversation starters that can help you make a family-focused sale

1. I'd like to talk to you about living a long life and how to be prepared in order to protect your family.

2. Long-term care insurance is not protection for you. It's protection for your family.

3. Long-term care is a family issue. Do you have a plan to protect your family? Is that plan funded?

4. It's not a question of who will take care of you. Your family will because they love you. Instead, it's a question or how your family will take care of you and the impact it will have on them.

5. Long-term care insurance allows your family to keep the promise they made to take care of you by providing the funds to help them do it better and longer.

Disability Buy-Out & Overhead Expense: Important Extensions of Business Continuation Planning

Producers who work closely with business owners most likely have discussed plans to continue the business in the event of death. A natural extension of this planning is to make your business clients aware of two equally important needs that can be overlooked - disability buy-out and overhead expense coverage.

While many business owners plan for the survival of their businesses in the event of death, many don't consider the effects of disability on the firm's future. Or, like many of us, they just don't believe they will ever become disabled. Two types of coverage can help.

1. Disability Buy-Out Insurance provides funds for the purchase of a
disabled business owner's interest in the event of a long-term, total disability.
2. Overhead Expense Insurance covers operating expenses of a business
when the owner can no longer generate revenue due to disability.

The two products work nicely in tandem. Overhead expense fills the gap immediately following the onset of disability to keep the doors open. If the disability becomes long term and a buy-sell agreement is in place, disability buy-out can fund this obligation.

The market for disability buy-out and overhead expense is primarily small businesses. The owners play an active role in the business and often, their personal service is essential to the business' survival. By offering disability buy-out and overhead expense, you can address the full line of business continuation needs of this market. You'll also be in good position to generate additional compensation by expanding your markets and product lines.

Are You Scared of Disability Insurance?

I have had to face a hard truth; that not every financial professional wakes up in the morning wanting to sell disability insurance. In fact, several of my producers have confessed that they will only sell DI when their clients make them. I know that you are probably laughing at this statement, but ask yourself, "Am I laughing because it is so ridiculous or because it accurately describes my approach to DI?"

Why are some of the most experienced and accomplished professionals in our industry scared of disability insurance? The answer is simple; it is not like riding a bike. If you do not deal with DI on a regular basis, you will forget how it works. There are so many moving parts, definitions and rider; that it is hard to keep up. Because of this, many choose not to broach the subject with their clients.

What a hole this leaves in your client's financial plan. Your client's income is their largest asset. It is the foundation of every financial plan you make for them. Without it, bills aren't paid, retirement isn't funded, and a legacy is lost.

So, how do you protect your clients without getting bogged down in the minutia of a disability policy? You focus on the need. The policy is just a financial vehicle used to fulfill that need. Most clients do not need all of the bells and whistles that accompany disability policies. They just need something to help them pay the bills. At its core, all a disability policy does is pay a monthly benefit if you are unable to perform your job due to an accident or illness. That is it.

Remember to focus on the hole and how a disability policy can fill that hole. You don't have to make it overly complicated. Just think; a duck has made millions off of just saying that it helps if you get sick or hurt and can't work.

Creating Leverage with Multiple IDI Policies

If you have a client whose DI claim is denied, what is the process? First, they have to appeal the decision. Then, if things don't go their way, they may even end up having to sue the company. All the while, your client is without an income and believes that it is your fault. Here is a simple way to help your client that may add leverage at claim time.

Diversify. Write 2 policies instead of 1.

We have seen examples when a policyholder filing claims with two different companies has one claim approved while the other is denied. While ideally we would like both companies to approve a legitimate claim, look how better off your client may be due to diversification.

1. They receive at least some of their disability benefits while working through the appeals
process with the other company.

2. They can use the fact that one company is paying benefits as leverage with the company
that has denied the claim. "They are paying the claim, tell me why you are not."