1. overcoming objections when selling Disability Income (DI) insurance DI 1237 9-13For Producer use only. Not for use with clients.

2. disclosures In approved states, Disability Income insurance (forms 4501NC, 4502GR and 4503BOE) is issued by Ameritas Life Insurance Corp. located at 5900 O Street, Lincoln, NE 68510. In New York, Disability Income insurance (forms 5501-NC, 5502-GR and 5503-BOE) is issued by Ameritas Life Insurance Corp. of New York located at 1350 Broadway, Suite 2201, New York, NY 10018. Policy and riders may vary and may not be available in all states. This information is provided by Ameritas ®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company, including, but not limited to, Ameritas Life Insurance Corp., Ameritas Life Insurance Corp. of New York and Ameritas Investment Corp., member FINRA/SIPC. Ameritas Life Insurance Corp. is not licensed in New York. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas ®, visit ameritas.com. Ameritas ® and the bison design are registered service marks of Ameritas Life Insurance Corp. © 2013 Ameritas Mutual Holding Company DI 1237 9-13For Producer use only. Not for use with clients.

3. understand the purpose of objections Objections are to be expected Often clients disguise the real reason they fail to buy They may not see the need or are not sure the product will deliver the desired outcome Sufficient fact-finding can help ensure your proposal addresses the agreed upon needs that are identified during the fact-finding process DI 1237 9-13

4. For Producer use only. Not for use with clients. overcoming objections A well-crafted presentation can eliminate or reduce the number of objections by anticipating and preparing for them throughout the presentation Establishing the budget early in the process can help alleviate the ‘no money’ objection DI 1237 9-13

5. For Producer use only. Not for use with clients. overcoming objections Establish rapport Get agreement at each step prior to moving to the next step Focus on benefits Recognize client concerns Acknowledge the concern Clarify your understanding of the concern Resolve and continue forward DI 1237 9-13

6. For Producer use only. Not for use with clients. what happens If they don’t have objections? It is better to have dialogue throughout the discussion “Here are common concerns or objections I hear…” DI 1237 9-13

7. For Producer use only. Not for use with clients. common objections and your responses Common Objection I have it through work. Your Response Congratulations. I want to review your plan. Can you please get copy of your group booklet. Some things to remember about group plans include: 1) the plan protects of percentage, typically 60%, of your base salary - it often does not cover any variable compensation you might receive. 2) the premium is usually paid for by the employer, meaning that benefits are taxable. 3) the plan will have a cap, which limits the percentage covered in higher incomes. 4) it is not portable - meaning that if you leave, for any reason, the coverage does not follow you. Let’s get a copy of your plan and ensure it is providing the coverage you and your family need. DI 1237 9-13

8. For Producer use only. Not for use with clients. common group LTD provisions Group LTD plans have common characteristics Group maximum benefit (often $5,000 or $6,000/month) The definition of earned income usually is base salary only... Look for situations where there is a significant amount of ‘variable compensation,’ and incomes that go above the maximum covered under the contract The elimination period – how long they must be disabled prior to benefits being paid Usually is employer paid, thus taxable benefits. There are only limited benefits within a group LTD plan that can substantially be improved for a key employee group Lack of portability DI 1237 9-13

9. For Producer use only. Not for use with clients. common objections and your responses Common Objection I/we can use our savings to keep us afloat if disabled. Your Response That is often what I hear. Here is why I want to explore another option. During our fact-finding process, we gathered information about your current savings and other financial resources. It has taken you years to accumulate those, and often you have identified things you want to purchase or pay for with those savings. These included college funds, a new home, vacations, etc. Do you realize that if you saved 10% of your income for 10 years, one year of disability would wipe out those savings? Additionally, your contributions and your employer’s match on any 401k or 403b would also stop. That is why we need to look at other options. DI 1237 9-13

10. For Producer use only. Not for use with clients. worker’s savings only last a limited period of time Average # of Month’s In Pre- Disability Income Saved Source: U.S. Census Bureau Survey of Income Program and Participation Income DI 1237 9- 13

11. For Producer use only. Not for use with clients. common objections and your responses Common Objection If either my wife or I become disabled, we could live on the other’s income. Your Response That is a common idea - but flawed. We have established that you live on both incomes. You want to save more of your joint income and to fund upcoming costs - college savings, home purchase, vacation home, etc., but we have discussed how difficult it is to accomplish. A disability of one of the two breadwinners will worsen that situation. Additionally, are you aware of the number of circumstances where the primary care-giver is the spouse of the disabled family member? DI 1237 9-13

12. For Producer use only. Not for use with clients. reality check So you currently save one or the other’s income? How many months could you live on your current savings? You indicated you are trying to save for a new home, college savings for your children…If a disability struck and you were living off of one income, could these dreams be realized? DI 1237 9-13

13. For Producer use only. Not for use with clients. common objections and your responses Common Objection I thought that is what Social Security was for. Your Response You and I both pay into the Social Security Administration, and you and I are covered under the provisions of the Social Security disability insurance program. However, you need to understand the system and its limitations. First, the Federal Law limits payment to those who cannot work because they have a medical condition that is expected to last at least one year or result in death. Social Security does not pay for partial or short-term disability. According to the Social Security Administration, ‘It can take a long time to process an application for disability benefits…” The Council for Disability Awareness (CDA) reported that in 2010 the average time from disability to first check was 17 months. You need to know that the eventual approval rate, often following appeals, is in the 37-39% range over the last several years. Finally, due to your income, you need to understand that the maximum payable under Social Security is approximately that of the poverty level. That is why I want to review a personal plan that will be there, whether or not Social Security is or isn’t. DI 1237 9-13

14. For Producer use only. Not for use with clients. SSDI benefits do not replace enough pre- disability income Source: Social Security Administration, U.S. Department of Health and Human Services Poverty Level DI 1237 9- 13

15. For Producer use only. Not for use with clients. common objections and your responses Common Objection What about Worker’s Compensation? Your Response Many assume that their disability will be covered by Worker’s Compensation. You need to understand that benefits are limited to disabilities and or medical expenses that are work- related. Few illnesses can be shown to be related to one’s work, and over two-thirds of all injuries are not work related. This is really not a likely option that you can count on in our planning process. DI 1237 9-13

16. For Producer use only. Not for use with clients. unintentional disabling injuries by class, 2008 Source: National Safety Council, Injury Facts, 2010 Edition DI 1237 9-13

17. For Producer use only. Not for use with clients. common objections and your responses Common Objection Why do I need this coverage? Your response Few realize how many Americans lose their homes and all their savings due to disability. Almost half of all home foreclosures are due to disability. Medical problems contributed to 62%* of all personal bankruptcies filed in the U.S. in 2007– an estimate of over 500,000.10 This is a 50% increase over results from a similar 2001 study**. COBRA is often not an option due to the limited financial resources of the disabled employee or their family. * The American Journal of Medicine, June 4, 2009 Medical Bankruptcy in the United States, 2007: Results of a National Study; David U. Himmelstein, MD, Deborah Thorne, PhD, Elizabeth Warren, JD, Steffie Woolhandler, MD, MPH **U.S. Courts, Bankruptcy Statistics, 12-Month Period Ending December 2007 DI 1237 9-13

18. For Producer use only. Not for use with clients. chances out of 1,000 of at least one long-term (90-day) disability Source: Gen Re Disability Fact Book, Sixth Edition, 2010 DI 1237 9-13

19. For Producer use only. Not for use with clients. risk of long-term disability vs. risk of death Source: Gen Re Disability Fact Book, Sixth Edition, 2010 DI 1237 9-13

20. For Producer use only. Not for use with clients. common objections and your responses Common Objection Since I own the business, I would simply continue to take my income out of the business. Your Response When was the last time you took a month or more off from work? You can’t because the business is really you. Where would the business be if it was a disability that prevented you from going to work? We have a better solution that protects both you and your business. DI 1237 9-13

21. For Producer use only. Not for use with clients. common objections and your responses Common Objection I will continue to pay myself or a key employee if disabled Your response That is a common answer. There are ways for us to make that idea work. However, we need to ensure that the business can continue the salary, and have it recognized as a legitimate business expense and is deductible as a wage expense. That is done by implementing a Salary Continuation Plan. Let me review how that works. DI 1237 9-13

22. For Producer use only. Not for use with clients. establishing a salary continuation plan IRC Sec. 105 Legal Requirements Plan must be in effect prior to a disability Eligibility must be established; employers using insurance can discriminate on the basis of employment class, salary level, or length of service The plan must be communicated to the participating employees The benefits available should be in writing in a corporate resolution or business memorandum In order to qualify for tax-exempt status, the plan must be for employees only It is usually advantageous to ensure the program using insurance products versus the uncertainty of a self-funded program FASB 112 DI 1237 9-13

23. For Producer use only. Not for use with clients. common objections and your responses Common Objection What you are recommending is an additional cost on top of the expense my firm is paying for our group LTD plan Your Response That may be true. However, I suggest we review your disability plan. We may be able to redesign the program to better serve your key employees, including yourself, and reallocate costs or benefits so that the firm has no additional out-of-pocket costs. Additionally, we can fix some costs, so they do not continue to increase, by using individual products versus the group chassis. DI 1237 9-13

24. For Producer use only. Not for use with clients. redesigning the group LTD plan Several items can be modified in an existing or a new program. These include: Percent of earned income covered, i.e. 50% or 60% Who is paying the premium (Section 162 or 2004-55) Maximum amount payable under the plan Sources of income included in the definition of earned income Elimination or waiting period Occupational definition Additional riders, although must of these plans tend to be very ‘vanilla’ DI 1237 9-13

25. For Producer use only. Not for use with clients. Common Objection Why haven’t I heard this from the agent who handles our other employee benefits? Your Response Disability income insurance has long been a product that many agents do not market. Additionally, the agent that handles employee benefits tends to focus on how group products can be used within the business structure to handle such concerns. I focus on executive benefits and how to maximize the use of group plans, while providing extra value to the business owner(s) and his or her key employees common objections and your responses DI 1237 9-13

26. For Producer use only. Not for use with clients. the LTD shortfall Consider this common example: Employer-paid Group LTD plan covers 60% of base income to a maximum of $6,000. The benefit is taxable. Base Annual Income Total Income with Bonus Gross Monthly LTD Benefit Net Monthly LTD Benefit* % Net Income Replaced* $100,000$130,000$5,000$3,75046% $130,000$160,000$6,000$4,50045% $180,000$230,000$6,000$4,50031% $240,000$300,000$6,000$4,50024% *Assumes 25% tax rate at all incomes DI 1237 9- 13

27. For Producer use only. Not for use with clients. more income protected! Total Income w/ Bonus Net Monthly LTD Benefit % Net Income Replaced* $130,000$3,75046% $160,000$4,50045% $230,000$4,50031% $300,000$4,50024% Employer-paid LTD with supplemental Individual Disability Income Insurance Total Income w/Bonus Net Mo. LTD Benefit Individual DI Net Benefit Combined Net Mo. Benefit % Net Income Replaced* $130,000$3,750$3,150$6,90085% $160,000$4,500$4,000$8,50085% $230,000$4,500$7,700$12,20085% $300,000$4,500$11,400$15,90085% Employer-paid LTD only: 60% to $6,000 monthly maximum benefit (base earnings only). *Assumes 25% tax rate at all incomes DI 1237 9-13

28. For Producer use only. Not for use with clients. Common Objection Why should I spend additional dollars for disability income insurance, above and beyond what I already pay for the group plan? Why not simply increase the group plan? Your Response That is a great question(s). And I can tell you that is often what is first discussed. However, the fundamental issues with such an approach still exist - What sources of income are included in the calculation of earned income and limitations on the maximum percentage of you or your key employee. The combination of group and an executive package insures a higher percent of their gross earnings, creates an executive level program that you determine and also provides you a way to create ‘golden handcuffs.’ common objections and your responses DI 1237 9-13

29. For Producer use only. Not for use with clients. forms of income found in the small business market What is or isn’t included in the definition of base salary in the LTD plan booklet? Salary – eligible for group LTD plan Dividend – NE* Commissions – most likely NE Bonus – needs to be included in definition; usually requires an averaging over 2 or 3 years Employee Benefits - NE Pension contribution - NE Car allowance – NE Does changing the maximum on the group LTD plan really improve the situation of the highly compensated owner or employees of the firm? * NE = not eligible DI 1237 9-13

30. For Producer use only. Not for use with clients. Common Objection Why should I accept this policy with an exclusion and/or rating? What value does this provide me? Your response I too wish I had a standard policy to deliver. However, let’s remember that it was a condition you noted during the completion of the application. You and your personal physician noted the history. I would suggest we focus on all the conditions that are not excluded. common objections and your Responses DI 1237 9-13

31. For Producer use only. Not for use with clients. send us your objections If you have heard or hear other objections, please forward those to us. We will review the objection and attempt to provide a way to overcome it. DI 1237 9-13

32. key contacts Your Agency or Brokerage Manager Your Ameritas ® Sales Development team Your GSI Regional Director The DI Product Management team DI 1237 9-13For Producer use only. Not for use with clients.