Long Term Care and Disability Insurance

UNDERSTANDING WHAT GOES INTO A DISABILITY UNDERWRITING DECISION

Presented by Donna Ries The purpose of disability income is to protect your client’s income in the event they should become disabled from an accident or sickness and unable to work.  The following are common areas every disability carrier considers. Age:  Disability income insurance is designed to protect your client’s income during their working years.  The issue age has a direct impact on the premium paid for coverage.  Generally the issue ages are between the ages of 18 – 60 (the higher the age, the higher the premium) and since no one has found a way to reverse the aging process yet, we have to go with their current age. Income:  The benefit amount your client considers has a direct correlation with your client’s income.   The entire amount of income is typically not covered; otherwise, the client would not typically have an incentive to try and return to work.  If your client is paying for their own disability insurance with after-tax dollars, the monthly benefit amount averages between 50% to 60% of their income and it would be paid tax free.  However, if your client’s employer is paying for coverage, or if the employee is paying the premium with pre-tax dollars, a larger monthly benefit is typically allowed because the benefits are taxable to the employee. It is also important to specify if your client is self employed.  If the client’s income is derived from 1099 reportable income, then the amount of income needs to be stated in terms of net income instead of gross income because of the business deductions allowed. Occupation:  Disability protection deals with the type of work your client participates in.  The more hands-on or risky the occupation, the higher the premium could be.   It is important to find out your client’s day-to-day duties and not just a job title to determine their occupational class.  For instance, if your client states that they are a manager, that description is too vague to determine a quote.  A little bit more information will help in determining what occupation class to quote from.  Managing a clerical staff is certainly different from managing a tree trimming crew.  The risk between these two types of managers is significantly different. Health:  Your client’s overall health is taken into consideration.  Height and weight certainly play a role in determining eligibility and each carrier has a slightly different approach with this issue.  Your client’s health history is taken into consideration when determining eligibility and it may necessitate an exclusion if the health condition is significant. These considerations for disability insurance are common factors no matter what carrier you choose for your client.  Having a better understanding of what goes into the underwriting of disability protection will certainly help you better explain the process for your client.  Feel free to call your Financial Brokerage DI marketing specialist at 800-397-9999 to help you pre-qualify your client.  We are here to help you quote and place your next disability case!  
Long Term Care and Disability Insurance

Help your Clients Understand the Financial Pitfalls of a…

Presented by Leonard Berthelsen   Most consumers would be hard-pressed to explain what their real out-of-pocket costs would be if a major health issue occurred.  Deductibles, co-pays, primary doctor vs. specialist, generic vs. name brand are just a few of the costs and decisions that come up.  Then there are those expenses not really talked about or covered in their health plan such as travel, lodging, experimental drugs and procedures, not to mention time off work. Critical Illness and Cancer/Heart Attack/Stroke coverage can be a tool that financial professionals use to bridge the gap created by these out-of-pocket expenses.  Having a lump-sum check arrive while your client is undergoing cancer treatment or recovering from a heart issue can be a huge relief to them and their families. As their health plans have increased deductibles and co-pays in order to keep premiums down, this results in only “kicking the can down the road” because eventually the cost is going to come back to your clients in the form of payments for those higher deductibles and co-pays. Many people have limited disability coverage at work, if they have it at all, and it may only pay a portion of their salary or wages.  That loss of income potentially poses a huge financial risk to your client.  Having a critical illness plan can soften the blow from reduced or stopped paychecks. Critical Illness and Cancer/Heart Attack/Stroke coverage can be tailored to your clients’ exposure and are designed to have affordable premiums.  In addition, they potentially will pay for those expenses not covered by their health insurance plan.  These products have limited underwriting and great compensation. Contact your Financial Brokerage Sales Manager today at 800-397-9999 to find out how Critical Illness and Cancer/Heart Attack/Stroke coverage can help your clients weather the financial risk from a health crisis!
Annuities

Health Care in Retirement

Presented by David Corwin In 2012, men reaching age 65 had an average additional life expectancy of 17.8 years, while woman reaching age 65 could expect to live an additional 20.4 years on average. While estimates vary, a couple retiring at age 65 without private health insurance from a former employer can expect to pay significant out-of-pocket health care costs during their retirement years. For example, estimates show that a 65-year-old couple who retired in 2013 needs about $220,000 to cover medical expenses throughout retirement, a 38% increase from the $160,000 first estimated for those retiring at age 65 in 2002. This estimate applies to retirees with traditional Medicare coverage and does not include costs of dental care, long-term care or over-the-counter medicines. About one-third of individuals that turned 65 in 2010 needed at least three months of nursing home care, 24% more than a year, and 9% more than five years. The national median daily rate in 2013 for a private room in a nursing home was $230, an increase of 3.6% from 2012. The average length of a nursing home stay is 835 days. At a median daily rate of $230, an average nursing home stay of 835 days currently costs over $192,000. With all those statistics in mind, the rising cost of health care in the United States has become one of the primary risks to a financially secure retirement. While lower (than in 2012), this year’s estimate is still daunting for many retirees, and it will consume a considerable amount of a couple’s retirement savings. It is extremely important that health care costs are factored into retirement savings strategies today so that retirees can be prepared to pay their medical bills throughout retirement. With health care costs expected to continue increasing faster than inflation, the time to plan for your future health care needs is now… before you retire. Your ability to enjoy a financially secure retirement can be enhanced by planning for future needs such as:
  • Long-Term Care Services • Are you familiar with the variety of long-term care services available? • If it becomes necessary, what type of long-term care services would you prefer? • How will you pay for any needed long-term care services?
  • Advance Directives • Have you communicated your medical care wishes in the event you suffer a catastrophic medical event? • Have you named someone else, a spouse or family member, to make medical decisions for you in the event you are incapacitated?
  • Paying for Health Care in Retirement • Do you know what your out-of-pocket health care costs might be after you retire? • Are you aware that Medicare, while it covers many health care costs, has significant limitations? • Are you familiar with the various types of insurance that can help pay health and long-term care costs not covered by Medicare?
Disability

Are you living with half a health plan?

Presented by Donna Ries Medical plans cover the costs of doctors and hospitals, but are your clients prepared to cover the financial costs when an unexpected, devastating event occurs and they are unable to work? Without an income, who will pay for the basic necessities such as mortgage payments, utilities, gas, groceries and other necessities? According to a 2005 Harvard study, over half of all personal bankruptcies and mortgage foreclosures are a consequence of a disability. Disabilities may occur for an extended period of time. Per the Council for Disability Awareness, long term disabilities last 31.2 months, on average, so the long term financial consequences can be overwhelming. Most clients live paycheck to paycheck. There is little or no money left for unexpected emergencies such as an injury or illness – the primary causes of a disability. What to do? Help your clients plan ahead with a Financial Security Plan and be ready for the unexpected sickness or injury that may occur tomorrow.