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									                  And other Ways to
                  “Show the Max!”

                               by
                  Thomas Petersen, MBA, RHU
               Petersen International Underwriters




Please contact your local Plus Group office for more information. Go
to www.plusgroupus.com and click on the agency locator map to find
an office near you or call 800/831-1018.
                                                                       1
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         Spending Patterns in the USA
n   U.S. News and World Report

     –   Nearly 40% of family budget = Mortgage

     –   25% to 35% toward minor things:
          l Food

          l Clothing

          l Bills




    65% to 75% of income is consumed just to live!


                                                     3
     Spending Patterns in the USA
n   U.S. Bureau of Labor Statistics

     –   73,000,000 people surveyed

     –   Survey indicated that 35% to 40% was
         allocated toward the mortgage.




                                                4
   Disability Income Insurance: The Unique Risk
     As high as 80% down to as low as 50% to 60%

   Essentials of Disability Income Insurance
     As low as 58%




                                                    5
   Underwriting in Life and Health Insurance
    Companies
     “Most companies limit the maximum amount of
      disability income coverage available to 75 or 80
      percent of the insureds net income”

     Principals of Health and Disability Insurance
       Discussing maximum benefits – “A person earning
        $2,000 a month may be limited by Company A to a
        monthly benefit of $1,200, representing 60% of regular
        income.
                                                                 6
What is the
typical
percentage
used to insure
group
disability?




                 7
   Various 3rd party surveys – 65% to 75%

   Various Industry experts – 50% to 80%
       LUTC
       RHU
       LOMA
       The American College

   Traditional Group Disability – 60% or 2/3
                                                8
% Income Issued by Most Carriers
If 65% is the agreed upon number, why does the primary markets limit the coverage?


100
 75
 70                                 The Need Line
 60
 50
 40
 30
 20
  0
          75,000        150,000       300,000         500,000     1,000,000

                                                                                     9
                 Excess Disability
n   Not limited to just Personal Disability!

     –   Buy-Sell
     –   Business Overhead Expense
     –   Key Person

         What are the maximums from most carriers??




                                                      10
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1.   Individual
2.   Multi-Life
3.   Group Excess
4.   Top Hat




                    12
1)   Uses:
       1)    Personal and Business Coverages
       2)    Excess, Supplemental and Primary

2)   Monthly Benefit Maximums
       1)    65% personally paid
       2)    75% corporate paid
       3)    5 x annual income for Lump Sum
       4)    $$$ = Justification

3)   Benefit Period Maximum
       1)    1 to 5 years for personal coverage or
       2)    Lump Sum

4)   Contract Period Maximum
       1)    5 years

5)   Occupational Limits
       1)    None

6)   Underwriting Requirements
       1)    Full




                                                     13
1)   Uses:
       1)    Personal Excess, Supplemental and Primary

2)   Monthly Benefit Maximums
       1)    $50,000/month
       2)    65% of income

3)   Benefit Period Maximum
       1)    Up to 5 years for ages 18-59
       2)    Up to 3 years for ages 60+

4)   Contract Period Maximum
       1)    3 years for ages 18 to 59
       2)    1 year 60+


5)   Occupational Limits
       1)    None

6)   Underwriting Requirements
       1)    2 or more = Discount only
       2)    5 + applicants = discount and application and
             CFS only



                                                    14
1)   Monthly Benefit Maximums
        1)   $50,000/month
        2)   65% of income


2)   Benefit Period Maximum
        1)   Up to 5 years for ages 18-59
        2)   Up to 3 years for ages 60+


3)   Contract Period Maximum
        1)   3 years for ages 18 to 59
        2)   1 year 60+


4)   Participation and Size
        1)   100% and 10 minimum


5)   Underwriting Requirements
        1)   Up to 50 lives - 3 years of group experience
        2)   51 to 99 lives – 2 year group experience
        3)   100+ - 1 year of group experience
        4)   Pre-ex clause in effect


                                                            15
1)   Monthly Benefit Maximums
       1)    $50,000/month
       2)    65% of income


2)   Benefit Period Maximum
       1)    Up to 5 years for ages 18-59
       2)    Up to 3 years for ages 60+


3)   Contract Period Maximum
       1)    3 years for ages 18 to 59
       2)    1 year 60+


4)   Minimum Participation and Size
       1)    5


5)   Underwriting Requirements
       1)    2 years of group experience or short form app
             on eligible employees
            1)   Pre-ex clause in effect




                                                   16
   Standard Benefits
     Own Occupation
     Presumptive
     Recurrent
   Options
     Residual
     COLA
     Automatic Benefit Increase



                                   17
1)   Monthly Benefit Maximums
       1)   $10,000/month
       2)   65% of income


2)   Benefit Period Maximum
       1)   2 year and 5 year


3)   Contract Period Maximum
       1)   3 years


4)   Underwriting Requirement
       1)   Signed and dated Top Hat application and
            authorization
       2)   Copy of non-can DI policy issued within last
            90 days




                                                           18
   Determine eligibility using the 65% solution
    (or the $150,000 trigger)
   Fax or e-mail a copy of the newly issued policy
    and its application
   PIU will prepare an offer and Top Hat application
    for you
   Deliver 2 policies at the same time!
     If the clients likes the added coverage, pick up a check
      and have your client sign the application


                                                                 19
   Individual Underwriting
   Multi-life
     Discounts
     Underwriting considerations
   Group Excess
     Guaranteed issue
     Guaranteed-to issue (simplified issue)
   Top Hat
     Automatic issue

                                               20
                  And other Ways to
                  “Show the Max!”

                               by
                  Thomas Petersen, MBA, RHU
               Petersen International Underwriters




Please contact your local Plus Group office for more information. Go
to www.plusgroupus.com and click on the agency locator map to find
an office near you or call 800/831-1018.
                                                                       21

								
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