When it comes to the insurance industry, and specifically to how products are priced, men and women aren’t created equal.
Statistics prove that women live longer. So, when purchasing life insurance, they pay smaller premiums than men. Unfortunately, when it comes to disability insurance, that’s not the case.
All things being equal, a female will pay 30-50% more for a disability policy than her male counterpart. It’s because women are more likely to file a claim – not just for pregnancy, but for all types of claims.
The good news is that there is a solution. Multi-life. Most carriers offer some type of multi-life option, but I’m going to focus on Principal for this example. In addition to being one of the largest DI carriers in the market, they are also more flexible, and they offer unisex pricing options. To qualify as multi-life, they require policies to be placed on three or more people with a common employer. There is no requirement for the employer to contribute to the premium, although that’s certainly an option. In fact, the policies can be billed directly with no employer involvement.
Here we'll look at a 40-year-old female business owner in a white-collar occupation who lives in Indiana. For her policy, we’ll use a 90-day waiting period to age 65, and a $5,000 monthly benefit with residual. The premium for the policy, without any multi-life discounts, is $3,500 annually.
Now let’s assume that the client buys policies on two other employees. We just hit the magic number for making this a multi-life plan. Those two policies, after the discounts, can have annual premiums as low as $165 — which we can help you design. The client is paying a total of $330 per year for these two polices.
And now that the plan qualifies for multi-life, our client’s premium of $3,500 on her own policy is discounted to $2,300 annually. Her new premium, along with the $330 for her employees’ policies puts her total annual bill at $2,630. That’s an additional 25% savings, and her premium discount is locked in for the life of her policy — even if the other two policies are canceled later.
I believe that’s what we call a win-win.
Your Ash DI team can help you structure a multi-life plan for male and female owners. The discount on the females is much more significant — it lowers the female rate to be similar to that of a male — but don’t let that stop you from considering multi-life plans regardless of gender.
Take a minute to consider small businesses you work with. If multi-life is a viable solution to protect them and their employees, let us know. We’re here to help.
We all understand we’ll pass away someday. It’s a question of when it will happen, not if.
That’s why the need for life insurance is fairly easy to comprehend. Your clients usually purchase a policy to provide financial stability to the people they care about most if they were to pass away.
If your clients care enough to purchase life insurance for their loved ones, shouldn’t they look at disability insurance in a similar light?
Disability insurance can be a more complex idea to sell. Your clients hear the word “disability” and automatically think, “It will never happen to me.” Injuries or illnesses aren’t as certain as death, but they can be nearly as devastating.
Remember, disabilities do happen. Nearly one in four workers entering the workforce today will become disabled before retiring.1 Injuries and illnesses come in all forms and lengths. They’re not all catastrophic, and not all of them will last for the rest of your life.
But what about disabilities that keep you from working in your occupation for as little as six months, a year or even three years? Would your clients be able to keep up their family’s standard of living without an income during those timeframes? Research says 50 percent of Americans would be in financial trouble in less than a month if they became too sick or hurt to work.2
Essentially, disability insurance should be looked at as “paycheck protection.” Does your client’s family rely on their paycheck? Could your client retire tomorrow? Then isn’t their paycheck worth protecting?
Put in Practice: Not sure where to start? First, look at your existing book of business and make a list of clients who currently own Life Insurance. Next, reach out to those who wouldn’t be able to retire if they became disabled tomorrow. Finally, talk to them about protecting their family with disability insurance in the same way they’ve protected them with life insurance.
1Social Security Administration Fact Sheet, February 2013.
2Life and Health Foundation for Education (LIFE) Survey by Kelton, April 2012.
Josh Farrell’s goal is to provide income solutions before your clients become too sick or hurt to work, replacing any financial burden or uncertainty with relief and confidence. He’s worked exclusively with Ash’s Disability Marketing team for more than five years, so he brings experience and knowledge of individual and business-related disability products and case design.
Firefighters put their lives on the line every day; when they go to work, it’s no surprise they risk more than an average employee. Disability income insurance for firefighters is hard to come by, but Ash Brokerage works with carriers that will insurance this occupation. Due to the nature of the job and hazardous activities associated with fighting fires, however, the products available offer limited benefit amounts and restricted periods.
Typically, the policy will cover only total disability, and the benefit period will be a maximum of two years. Some carriers may offer a limited partial disability benefit, which means the policy holder would be limited from doing some of his/her daily activities, but not totally disabled. In this case, the insured would receive a reduced benefit.
It’s also important to note most firefighters are considered government employees. All disability carriers, no matter your occupation, consider government employees different from private business employees because government employees typically have part of their pension “pushed out” to them if they become disabled. Usually, there’s no way to stop this from happening, so carriers view this payment as a form of disability benefit. This limits the amount of coverage government employees can purchase, as compared to a privately employed person who doesn’t have any disability coverage.
If you have any clients who are firefighters, the least you can do is look into the possibility of obtaining disability income insurance to protect their paycheck. After all, they protect your home, business and family every day.
Most people know they need to save for retirement … that’s why most of us are saving. According to an article published in the Principal Financial Well-Being Index, 61 percent of workers are very concerned about their long-term financial future.
In the disability income world, we all know how important it is to cover our most valuable asset: our ability to earn a paycheck. But what about covering our retirement contributions? According to the Employee Benefit Research Institute, health problems are No. 1 reason workers take an unexpected early retirement. If your clients were to become disabled, would they be able to continue to contribute to their 401(k) or other retirement plans? The answer, most likely, is no.
A disability plan that covers retirement contributions can help protect your clients’ retirement in the event that they become too sick or hurt to work. I know adding another expense could make for a difficult sale. But, can your clients afford to NOT purchase this type of coverage?
Ask your clients how they plan to live in retirement. Maybe they want to spend their days volunteering. Or maybe they want to travel in their non-working years.
If they experience a health problem during their earning years, not only could their dreams of how they want to spend their retirement be crushed, but they could also have the burden of figuring out how they will save for an early retirement, or a retirement that includes unexpected medical expenses.
Put it in Practice: Talk to your clients who are contributing to their 401(k)s. Those who are at their maximum issue limits for DI insurance are great prospects as well. A policy that covers retirement savings allows them to purchase additional coverage on top of their personal coverage.
© 2018 Ash Brokerage LLC.