1. Disability Income: How to Sell it
Kenny Russell
DI Wholesaler
Crump Disability Solution Center

2. How likely is it that your client will become disabled?
What are the chances of being disabled?
The chart below shows the chances of being disabled for 90 days or more. The chart shows the
importance of purchasing coverage when you are young, since your chances of being disabled decrease
over time, as you grow closer to your retirement years. But even at age 50, there is almost a 1 in 3 chance
that you will be disabled, with the average duration a little over 3 years. Certainly, the chart shows the
importance of planning for a disability.
Your Age Your chances of being disabled Average duration of a Disability
(past 90 days) (past 90 days)
% years
% years
% years
% years
% years
% years
% years
% years
Source: Commissioner's IDA Morbidity and Commissioner's SO Mortality Tables, Society of Actuaries

3. What is your most Important Asset
WHAT IS IMPORTANT TO YOU?
Priority of what is important differs from person to person. What is more important to one person can be down the list of importance for the next individual.
Of the following items, please rank highest to lowest what is most important to you:
__ House
__ Car
__ Retirement
__ Income
__ Travel
__ Entertainment
__ Children’s Education

4. Rethinking Importance
Now please rank them again assuming you were hurt or sick and couldn’t work
__ House
__ Car
__ Retirement
__ Income
__ Travel
__ Entertainment
__ Children’s Education

5. Your Money Tree
What if you had a tree in your back yard that grew money?
What would you use that money for?
Food, Shelter, Automobile payments, Clothing, Entertainment, Children’s Education and countless other things
Now if I told you that you could only purchase insurance on one thing in your life, what would it be?
Your income is your Money Tree

6. What is Disability Income Insurance?
Protection against an Illness or Injury that may cause you to miss work for a period of time
Paycheck Insurance - How long could you afford to go without an income?
How long could you continue to pay your Mortgage if you were unable to earn money?
Would you have to borrow money from your retirement savings if you were disabled for longer than 6 months?
Lifestyle protection - Would you be able to maintain a reasonable level of your current lifestyle if you were unable to earn an income?

7. How Solid is Your Financial Foundation?

8. Potential Earnings

9. Question ...
Do you get up every morning and come to work only because you love your job, or do you need at least part of your paycheck?
Why do you work? What would happen if you couldn’t work?

10. When Disability Strikes
Income
Expenses
Food
Medical
Bills
Housing
Insurance
Utilities
Educational
Costs
Auto
Clothing
NEEDS

11. Where Will the Money Come From?
Savings
One year of disability could wipe out 10 years of savings
Spouse’s Income
Today most families depend on two incomes
Borrow
Borrowing can be difficult without income
Social Security
70% of all Disability applicants are rejected (Source: Social Security Handbook)
Sell Assets
Assets sold under forced conditions are often sold below market value
Disability Income

12. You Don’t Get Something For Nothing
If it were free, everybody would have Disability insurance to protect their income.
98%

13. Should You Buy Disability Insurance?
If you purchase Disability insurance and DO NOT become disabled, how will your lifestyle be affected?
If you do not purchase Disability insurance and DO become disabled, how will your lifestyle be affected?

14. What types of coverage are available?
Short term individual Disability
Long term individual Disability
Business overhead expense (BOE)
Buy-Sell
Key Person
Loan indemnification
Contract indemnification
Critical illness
Kidnap and ransom
Accidental Death and Dismemberment
High Limit coverage
Simplified DI, BOE and Buy-Sell
Guaranteed issue
Multi-life discounts (3 or more lives)

15. Quoting Process Collect client information
Classify risk based on age, state, occupation, income and contractual needs of the client
Input information in the quoting software
or fax to the producer or sales person

16. How can I make the underwriting process quicker?
Submit complete application packets.
Understand that underwriting Disability is not like underwriting Life.
Expect a standard turnaround time of 4 to 6 weeks from receipt of application to policy issue. A complete application packets can cut this time by up to 50%.

17. Medical conditions to be aware of
Many conditions that are acceptable for life may cause problems when submitting DI. Some examples are but not limited to the following:
Depression or Anxiety*
Counseling of any type*
Alcohol or drug history
Diabetes (type 1 and 2)
Irritable bowel syndrome or Colitis
Cancer history less than 5 yrs from date of last treatment
Heart attack or Angioplasty MS
* mental/nervous conditions account for 9% of overall Disability claims but the subjectivity of diagnosis causes carriers to be overly cautious.

18. Financial Underwriting
Financial documentation is required for Disability underwriting.
Normal requirements are two years tax returns.
Based on earned income
AGI used for self-employed individuals
Unearned income counts against earned income
Increasing income will be averaged
Decreasing income will not be averaged

19. Occupational Underwriting
Part of underwriting Disability is based on the client’s occupation. The better the risk and the better the claims history, the better the occupational classification. Better occupational classification equals lower premiums.
Most carriers use an occupational classification range of 1a to 5a. Most carriers consider better risks as higher occupational classes. A 5a being the best risk and a 1a being the worst risk.

20. Occupational Underwriting
Some examples of high occ classes are:
Attorney
CPA
Engineer
Pharmacist
Actuary
Executives
Some examples of lower occupation classes are:
Construction workers
Truck drivers
Plumbers

21. Question and Answer