1. 1 Preserving Financial Security with Individual Disability Income Insurance Presented by: Kevin Cloutier, Vice President Disability Resource Group, Inc.

2. 2 L o n g A g o

3. 3 T r a d e a n d B a r t e r

4. 4 The Industrial Revolution

5. 5 Income earning skills for the necessities of life Food Transportation Clothing Recreation Home Health Care Education Comfort

6. 6 Workers Compensation – 1908 Unemployment Compensation – 1919 Social Security Retirement Income – 1935 Cash Sickness Income Plans – 1942 Social Security Disability – 1956 Government Programs

7. 7 T a x L a w s Retirement Plans Profit Sharing IRA’s Pensions Keoghs 401K’s

8. 8 O L D A G E Retirement Income

9. 9 Leaving the problem of disability income replacement to an individual’s personal planning. FINANCIAL SECURITY

10. 10 Disabled? Me? Never!

11. 11 Limra Study What is the #1 reason why clients do not buy disability insurance? They have never been asked What is the #1 reason why producers do not sell disability insurance? They do not ask

12. 12 “I just got my client life insurance, now we are looking into the disability.” Approach differently

13. 13 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: JHA Disability Fact Book -2004 Edition Disability Death

14. 14 The Reality 30% of all people 35 to 65 will suffer a disability for at least 90 days and one in seven will be disabled for five years. * There is a disability caused by a motor vehicle crash every 30 seconds. ** One out of every two Mortgage foreclosures is due to a disability. 2% because of death. *** * Health Association of America; The New York Times, 02.05 **National Safety Council Accident Facts, 02.05 *** Health Affairs, The policy journal of Health Sphere, 02.05

15. 15 Everything Rests on Income The Reality

16. 16 What is your most Valuable Asset? Income

17. 17 The Money Tree

18. 18 Protect Your Most Valuable Asset Current Age $25,000 $35,000$50,000$60,000$100,000$125,000$150,000 30 875,0001,225,0001,750,0002,100,0003,500,0004,375,0005,250,000 35 750,0001,050,0001,500,0001,800,0003,000,0003,750,0004,500,000 40 625,000 875,0001,250,0001,500,0002,500,0003,125,0003,750,000 45 500,000 700,0001,000,0001,200,0002,000,0002,500,0003,000,000 50 375,000 525,000 750,000 900,0001,500,0001,875,0002,250,000 55 250,000 350,000 500,000 600,0001,000,0001,250,0001,500,000 60 125,000 175,000 250,000 300,000 500,000 625,000 750,000 Average Income to Age 65

19. 19 Debt Savings Depleted! Disability Normal Income Normal Expenses Savings Healthy When disability strikes, your financial security changes

20. 20 “I don’t sell disability insurance, I sell health insurance.” 50%

21. 21 Do you have a comprehensive health insurance plan? An unbalanced health insurance plan: You and Your Family Health Insurance Health Insurance helps cover: Hospital bills Doctor’s bills Medications Other medical treatment

22. 22 Do you have a comprehensive health insurance plan? A balanced health insurance plan: Health Insurance helps cover: Hospital bills Doctor’s bills Medications Other medical treatment Disability Income Insurance helps provide funds for: Food Clothing Housing Transportation Insurance premiums Continued retirement College education Disability Income Insurance You and Your Family Health Insurance

23. 23 “I don’t sell disability insurance, I sell investments and manage money.” INCOME

24. 24 Why else don’t you sell financial security… Complicated Product Expensive Underwriting Stinks

25. 25 B e l i e v e

26. 26

27. 27 B e l i e v e B u y M a k e a h a b i t o f i t !

28. 28 Complicated… Social Security Definition of Disability The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person must be not only unable to do his or her previous work or work commensurate with the previous work in amount of earnings and utilization of capacities but cannot, considering age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy. It is immaterial whether such work exists in the immediate area, or whether a specific job vacancy exists, or whether the worker would be hired if he or she applied for work.

29. 29 Too expensive… Age 50+ does get expensive Females are priced higher than males Find a premium that fits into their budget Look for Multi-life discount opportunities Don’t sell a policy with all the additional riders Make sure you gave the right income when asking for a proposal

30. 30 Which Job Would You Rather Have? Too expensive…

31. 31 Too expensive… Can you really put a price on what it will cost you? Health Future Earnings Insurability Assets Self-respect or Self-worth Peace of Mind Loss of Credit Rating

32. 32 Discounts 3+ lives with same employer > 15% - 20% Discount > Unisex rates: 25% savings for females

33. 33 Underwriting is too difficult… INCOME OCCUPATION HEALTH

34. 34 Pre-Screen Income –Salaried employee: W-2 –Business Owner: Sole Proprietor: Net Profit (Sched C, Line 31) S Corporation: Share of 1120S ordinary income (Sched K-1, Line 1) plus salary (W-2) plus pension Partnership: Schedule K-1 (1065) C-Corporation: Share of 1120 taxable income (page 1 line 28) plus salary (page 2 Schedule E) plus pension LLC: Depends on how they file

35. 35 Pre-Screen Occupation Occupation –What do you do on a daily basis? –Where do you perform those duties? –How long have you been performing those duties?

36. 36 Pre-screen Medical Issues Diabetes Depression and Anxiety Medication Chiropractic visits, Back Issues Build Issues High Cholesterol / High Triglycerides Sleep apnea Unresolved conditions, no diagnosis Surgeries Ulcerative Colitis

37. 37 O t h e r I s s u e s Part Time Working from Home Newly self-employed High Net worth

38. 38 Take SOME Underwriting out of the Sale Simplified Issue Programs Principal, Met, Assurity and others No Financials, Non-Medical Certain Guidelines Teleapp process

39. 39 Take ALL Underwriting out of the Sale Guaranteed Standard Issue -Employer Sponsored Cases Offers as low as 3 lives Worthwhile offers: 15-20 lives Great Offers 20+ lives Discounts of 20%-30% Unisex rates (huge savings for females) Available to Physicians on a limited basis -No Medical Underwriting -No Financial Underwriting

40. 40 A COMPLETE PORTFOLIO OF PRODUCTS for FINANCIAL SECURITY

41. 41 Individual Coverage Business Overhead Expense Buy-Sell Key Person Financial Security Portfolio

42. 42 Retirement Completion Loan Protection Impaired Risk High Limit Financial Security Portfolio

43. 43 Ask yourself Can my clients invest without income? Can my clients continue to pay for other insurance without income? Can my clients pay for health insurance without an income? What will I say to my clients when they get injured or sick and have no income because they can’t work …

44. 44

45. 45 What are Others Saying? “Coverage isn’t cheap. Due to price you may be tempted to forgo this insurance. Don’t. The consequences of going without it can be financially and emotionally devastating.” - Money Magazine “Before worrying about savings, one had better protect their income.” - USA Today

46. 46 What are Others Saying? “Failure to reflect on potential disability and provide for this possibility can wreak financial havoc on even the most successful professional.” - Making the Most of Your Money Jane Bryant Quinn “If you work for a living and have no disability insurance, you effectively have no financial plan.” - The Practice Lawyer

47. 47 “Even the individual of limited means can eventually pay big bills and big debts if only he retains the ability to work and earn a living. When that is lost, all is lost unless funds are available to replace the earnings” CHANGING TIMES - The Kiplinger Magazine What are Others Saying?

48. 48 Will you be sending your best clients a get well card when they get sick or hurt or will you be calling them and asking if they received their disability income benefits? What will you say?

49. 49 Kevin Cloutier 800.945.9719 drgdi.com kcloutier@drgdi.com