DI 101 Why DI? DisabilityCenter.com

Definitions of Disability  True Own Occupation Coverage  Modified Own Occupation Coverage  Transitional Own Occupation Coverage

True Own Occupation  Total Disability is the inability to perform the material and substantial duties of your occupation  Can work in another occupation and receive 100% of Monthly Benefit regardless of new income  Specialty Letter available

Modified Own Occupation  Cannot perform the material and substantial duties of his/her own occupation and not working in another occupation  Can choose to work in another occupation but not forced to work

Transitional Own Occupation  Can work in another occupation and receive 100% of Monthly Benefit until new income plus disability benefit exceeds the pre-disability earnings. DisabilityCenter.com

Residual Rider  Residual Rider has Own Occupation coverage  Cannot perform one or more duties of own occupation to qualify for monthly benefit  More than 15% loss of income or time triggers claim (20% with some carriers)  75% loss of income is considered a total loss and full benefits are paid DisabilityCenter.com

Specific or Presumptive Loss  Loss of sight, hearing, speech or two limbs is considered to be total loss and loss does not have to be irrecoverable  Waiting period waived  Benefit commence immediately DisabilityCenter.com

Future Increase Option  Guarantees rates and occupation class at the time of the original contract DisabilityCenter.com

Future Increase Option  No evidence of insurability required  Must qualify financially  Can exercise 100% of FIO within the first three policy years (must qualify financially)  FIO option available every policy anniversary up to including age 55 DisabilityCenter.com

Non Cancellable and Guaranteed Renewable  Non Cancellable Premiums are guaranteed and can never increase to age 65/67  Policy can never be modified  Policy can never be cancelled if paying premiums DisabilityCenter.com

Nondisabling Injury Benefit  Contractual provision built in UCL policy  Will pay 100% of injury medical expenses up to 50% of the base benefit, not to exceed $3000  Will pay per occurrence DisabilityCenter.com

Good Health Benefit  This provision is built into policy  Will reduce the waiting period 2 days for every year that no claim is filed  Waiting period can never go below 30 days DisabilityCenter.com

Automatic Increase Rider  This provision increase the monthly benefit by 4% each year for 5 year benefit period  No financial documentation required  No evidence of insurability required  Rider can be renewed after 5 years DisabilityCenter.com

COBRA Rider DisabilityCenter.com

Catastrophic Rider DisabilityCenter.com

Step Rate  Allows the premium to be lower for the first 5 years to assist Medical Residents in keeping cost down  Rates step-up (increase) in the 6 th year and stays level thereafter. DisabilityCenter.com

Why DI?  Your ability to earn an income is the greatest asset you will ever have  We all need to protect our ability to earn an income DisabilityCenter.com

We all take risks every single day:  Waking up/getting out of bed  Driving to work  Fire in home  Dying  Illness or Injury We often protect ourselves from these risks:  Health Insurance  Auto Insurance  Fire/Homeowners Insurance  Life Insurance What about the risk of becoming disabled? DisabilityCenter.com

1 in 96 1 in 5 1 in in 21 Odds For Different Risks Covered By Insurance Life DI Sources: Fire, Auto, DI – National Safety Council, 2005 Death – World Almanac, DisabilityCenter.com

DI Statistics The chart below illustrates that an individual’s chances of disability are 2 to 3 times greater than death during their working years (Commissioner's Individual Disability Table A. 1985) DisabilityCenter.com

Your most valuable asset is probably underinsured. You insure…..  Your home  Your car But, what about your income? DisabilityCenter.com

Money Machine If you had a machine that would give you $275 everyday, what would you do?  You do have such a machine – it’s you!  Make sure you protect your “money machine” if it breaks down.  You can help replace the income it is no longer making. DisabilityCenter.com

Did you forget to insure ME ??? The Goose that laid the golden eggs If you had a goose that laid golden eggs, which would you insure? We all insure our home, our cars, belongings – all these are the “eggs”, but how about the “goose” = your ability to earn an income ?

Two job story Which job would you take ??? Healthy Sick or hurt Job “A” $100, Job “B” $99,000 $60,000 DisabilityCenter.com

Do you carry a spare tire in your car at all times? Why? Are you planning on getting a flat today? No, but if you need it, it’s there! Protect your income NOW while you can, BEFORE you need it!

“I can depend on Social Security to pay disability benefits to keep me and my family out of financial trouble, right?” Not really ……… DisabilityCenter.com

Protect Your Most Valuable Asset Current Age $25,000 $35,000$50,000$60,000$100,000$125,000$150, ,0001,295,0001,850,0002,220,0003,700,0004,625,0005,550, ,0001,120,0001,600,0001,920,0003,200,0004,000,0004,800, , ,0001,350,0001,620,0002,700,0003,375,0004,050, , ,0001,100,0001,320,0002,200,0002,750,0003,300, , , ,000 1,020,0001,700,0002,125,0002,550, , , , ,0001,200,0001,500,0001,800, , , , , , ,000 1,050,000 Average Income to Age 67 DisabilityCenter.com

Other Financial Means  Savings? One year of disability can wipe out 10 years of savings The Life Underwriting Training Council. “Fundamentals of Financial Services Course.” Volume 6, 1997 edition. How would you replace your lost income?  Borrow? What bank would lend you money if you were disabled and unemployed?  Social Security? To qualify, your disability must be expected to last at least 12 months or end in death, in addition to other requirements You must also be unable to engage in ANY occupation.  Other Income? Could you maintain your standard of living without placing additional strain on you and your family? DisabilityCenter.com

The Good News and Bad News Good News People are living longer. Bad News Diseases that used to cause death are now leaving people disabled. DisabilityCenter.com

Disability On the Rise 70% 44% 36% 55% -73% -29% -48% -27% -32% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% Death Disability Hypertension Cerebrovascular Diabetes All Four Heart Diseases Source: National Center for Health Statistics Disability Death DisabilityCenter.com

Every 4 seconds someone is disabled at home. Every 9 seconds someone is disabled at work. Every 13 seconds someone is disabled in a motor vehicle Likelihood of becoming disabled Source: National Safety Council, Injury Facts 2004 Edition (NSC estimates) DisabilityCenter.com

Everything Rests on Income Act now to protect your clients‘ most valuable asset – THEIR INCOME DisabilityCenter.com

Thank you! Questions? DisabilityCenter.com Leading Edge Disability Center