selling DI to the middle market - Ameritas

selling DI to the middle market marketing materials

The middle market is huge and has gone unnoticed in the Disability Income Insurance marketplace. There are immense opportunities to reach out to this market with information on the need for disability income planning and the need for purchasing insurance protection.

selling DI to the middle market Sales Idea

The middle market is huge and has gone unnoticed in the Disability Income Insurance marketplace. There are immense opportunities to reach out to this market with information on the need for disability income planning and the need for purchasing insurance protection.

The middle market is defined as individuals earning between $40,000 and $100,000 who identify themselves as part of the middle class. They often work for smaller firms or are self-employed and have little, if any, access to employee benefits such as group long-term disability. The middle market presents a large opportunity for Disability Income Insurance (DI) sales:

This producer brochure defines the middle market and the opportunities it presents for DI sales.

• The market is huge (about 75-100 million people) and underserved • No one has approached this market to discuss disability planning • The need has never been greater as more employers are cutting benefits • Can lead to additional sales opportunities for other products While middle market households want to make sound financial decisions, they aren’t always sure where to start. They’re looking for financial advice, but don’t typically know where to get it. Most don’t have a life or disability income insurance agent. As a result, they don’t feel like their needs are being met.2 The DI conversation can create an opening for other planning ideas and product sales.

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For producer use only. Not for use with clients.

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The 2% Strategy sales idea, the Open Doors with BOE sales idea and DI for the Cost Conscious Buyer flyer provide strategies to help make DI more affordable for your middle market clients.

open doors with BOE insurance

life and DI combo sales sales strategy With a disabling injury occurring in the US every 1 second1, how can you afford not to offer disability income insurance to your clients? Not only would a disability affect their financial plan, but if they aren’t able to pay their premiums, how will that affect your financial plan?

Protect Your Sales With One Application If you had a client come to you wanting to put a plan in place to protect their family’s financial future, would disability income insurance be a part of that conversation? Many people are unaware of the danger that they may become disabled, or of the resulting loss of income they may suffer due to a prolonged disability. As a result, disability income insurance is often overlooked. The truth is, only 18% of consumers recall being approached about buying disability insurance—less than half as many as those being approached for life insurance2. Life insurance is one of the easier products to sell because most people view it as a necessity and understand its concept and benefits. While it may be difficult to initiate a conversation about disability income insurance, insuring against premature death and disability are equally important parts of safeguarding a family’s future. One way to make the process easier is by offering the Life and DI Limited Underwriting Program. Through this program you can:

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Sales Idea

Business owners understand the importance of cash flow. If you can help them understand the likelihood of disability and the effects it can have on that cash, you can help them understand the importance of Business Overhead Expense (BOE) Insurance. That can open the door to other discussions, including the business owner’s need for additional disability and life insurance coverage.

• Obtain up to $300,000 in life insurance for your client • Replace up to 60% of your client’s income in the event of disability • Sell both products with one application • Sell both products with reduced underwriting—no exam or lab work is required You can also make the process more affordable by using the 2% Strategy. Some clients may object to having both policies, thinking it is more than they can afford. The 2% Strategy bases the premiums paid for both policies on just 2% of your client’s current gross income.

The Facts Speak For Themselves Look at a typical female, age 35. She’s 5’4”, 125 pounds and a non-smoker who leads a healthy lifestyle. She has worked as a graphic designer for three years and earns just over $75,000 per year. She has the following risks3:

Business owners have a great need for revenue to help keep the business doors open if they become too sick or hurt to work. BOE is designed to help cover the fixed-cost expenses and obligations of the company or practice.

• A 24% chance of becoming disabled for 3 months or longer during her working career • A 38% chance that the disability would last 5 years or longer • The average disability for someone like her lasts 82 months

The essential component in most small businesses is the business owner. It’s the owner who holds the company together and keeps it running. If the owner becomes too sick or hurt to work, it could be detrimental to the business. Besides the normal monthly expenses of employee salaries, rent or To reduce costs without resorting to a longer mortgage payments and other company expenses; elimination period, a shorter benefit period or a theoffers owner may also need to consider hiring a lower monthly benefit, DInamic Foundation temporary replacement in order to keep their cost-saving strategies. business functioning.

cost-conscious protection

Use the Life and DI Limited Underwriting Program to cover all of her future income risks. As a Preferred NT for life and a 5A occupational class for DI, earning $75,000, she may get4: Disability income insurance provides a solid

foundation for your financial future. As a mutual

• 10 year term life insurance with a $250,000 death organization, backed with financial strength, benefit = a monthly premium of $12.92

Ameritas Life Insurance Corp. is a leading provider

• Guaranteed Renewable DI insurance with a $3,900 of disability income insurance. By putting your trust per month benefit5 = a monthly premium of $110.54 ®

in Ameritas you receive a wide range of benefits

and services while$1,481.52, protectingorwhat Her annual premiums would equal 2.0%matters most. of her annual gross income.

DInamic Foundation disability income insurance provides the protection and flexibility you need to fit your budget. The case study below shows the cost of our highest quality combination of provisions and various ways to reduce the cost while still receiving an excellent value. The rating example below is a For Registered Representative and agent use only. Not for use with clients. sample of a traditional proposal for representative the professional marketplace. For a male, age 40, nontobacco, occupational class 6A Policy Type:

Noncancelable and Guaranteed Renewable (NC)

Monthly Benefit:

$5,000

Elimination Period: 90 days Benefit Period:

To Age 65

Def. of Disability:

Own Occupation for the length of the benefit period

Riders:

Enhanced Residual Cost of Living Adjustment (COLA) - 6% Compound $10,000 Future Increase Option (FIO)

Annual Premium for the above rating example: $2,457

If You Make This PlanDesign Change Change policy type to Guaranteed Renewable (GR)

You Will Save* 18.7% ($460/ year)

• The product has tax advantages and is relatively inexpensive versus other disability products • Allows you to focus the interview and discussion not only on the immediate needs of the business, but also the needs of the owner

Target Market Business Overhead Expense insurance is for medical/dental professionals and small business owners who are actively engaged in their business on a full-time basis. The day-to-day presence of these business owners is vital to the business and a disability will result in a definite loss of revenue to the company or practice. These businesses have a great need for income in order to keep the doors open, retain current customers or patients and remain viable if they suffer a disability. Consider prospecting with BOE to help further your efforts in reaching out to these markets. It may lead to additional business or personal protection strategies using insurance.

What This Means (Please see back of this page for full descriptions). With GR we reserve the right to increase premiums, however the increase must be on a class of people, apply to everyone in that class and receive state approval.

Change definition of disability to Own Occupation/ Not Working for the length of the benefit period

9.7% ($239/ year)

Benefits are payableDI for1664 the 10-14 length of the benefit period if, due to disability, you are unable to work in your own occupation and you are not working in any other occupation for wage or profit.

Change to Basic Residual rider

4.6% ($114/ year)

Unlike Enhanced Residual, there is no Recovery Benefit included, and the maximum benefit is 50% of the base monthly benefit.

Change to 3% Simple COLA rider

6.8% ($168/ year)

The increase is a flat 3% each year regardless of the rate of inflation. There is no compounding, no “catch-up” provision, and no right to purchase increases.

If You Made These Plan Design Changes

The Savings* Would Total 35% ($859/ year)

Changing the Original Annual Premium from:

To a Revised Annual Premium of:

$2,457

$1,598

* Exact savings will vary by age, gender, occupation class, tobacco status, and state of issue.

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• Few agents market BOE

Cost-Saving Strategies

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BOE has some significant advantages in the marketplace:


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Client Prospecting This postcard and email help you reach out to prospective clients, educating them about the importance and affordability of DI.

protect your greatest asset Disability income insurance allows you to protect your most valuable asset— your income—in the event you become too sick or hurt to work.

Additional materials are available that provide more details on the threat of disability and how to protect against it.

If you suddenly lost your ability to work and earn a living due to a sickness or injury, how would it impact your life? The chances of it happening to you are greater than you think.

55% would need to borrow to cover a $5,000 financial emergency

protecting your income isn’t out of reach

1 in 4 chance of being disabled for 3 months or more. 1 in 8 chance of being disabled for 5 years or more.

LIMRA, U.S. Consumers Today, The Middle Market, 2014

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Social Media Prospecting Ameritas provides several posts on Producer Workbench for you to use that help establish you as a knowledgeable resource for disability income insurance.

Client Flyer and Follow-Up Letter

income matters

disability income insurance DInamic Fundamental®

protect your earnings Disability Income Insurance

Ameritas Life Insurance Corp. Ameritas Life Insurance Corp. of New York

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Insurance Needs Analysis

This fact finder can help your client organize their life insurance and disability income insurance needs.

Date:

PERSONAL INFORMATION

Once a prospect contacts you through general prospecting, follow-up with this letter and flyer.

protect your greatest asset

Think of disability income insurance as insurance for your paycheck. It allows you to protect your most valuable asset—your income—in the event you become too sick or hurt to work.

If you suddenly lost your ability to work and earn a living due to a sickness or injury, how would it impact your life?

55% would need to borrow to cover a $5,000 financial emergency.1

The Chances of it Happening are Greater Than You Think shopping

g through the

orderin sonalized by Representative Name ce can be per Agency Name This pie

1 in 4 chance of being disabled for 3 months or more.2

Address City, State, Zip Phone, Fax Email, Website

LOGO

cart.

1 in 8 chance of being disabled for 5 years or more.2

This flyer outlines the value of DI insurance.

Illness (90%)

not

Accident/Injury (10%)

Less dramatic and much more common illnesses like cancer, heart disease or diabetes cause the majority of long-term disabilities.3 (Agent Name) is not an affiliate of Ameritas or its subsidiaries.

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Name: ___________________________________________________________________________________________ Age: _______________ Sex: _____________________ Underwriting Class: ________________________________ Spouse’s Name: ___________________________________________________________________________________ Age: _______________ Sex: _____________________ Underwriting Class: ________________________________ IMMEDIATE OBLIGATIONS Final Expenses (typically the greater of $15,000 or 4% of your estate): $ ____________________________________ Outstanding Debts (other than your mortgage): $ _______________________________________________________ Outstanding Mortgage: $ ___________________________________________________________________________ College Funding Needs (Total projected college costs—tuition plus all other costs such as room and board, books, etc., less current funds in the child’s name)

Child 1: $ ___________________________ Child 2: $ _________________ Child 3: $ ________________________ Child 4: $ ___________________________ Child 5: $ _________________ Child 6: $ ________________________ FAMILY INCOME NEEDS Total annual income your family would need if you died today (typically 60%-75% of total income): $ _______________ How many years should income be provided? __________________________________________________________ What is the value of your current savings and investments (not including retirement funds)? $ _____________________ What are your current retirement savings? $ ___________________________________________________________ What is your spouse’s annual income (assuming work will continue following your death)? $ ________________________ How many years does your spouse expect to work? ____________________________________________________ LIFE INSURANCE NEEDS Immediate Needs $ _____________ + Income Needs $ ____________ = Life Insurance Need $ _______________ EXISTING LIFE INSURANCE GROUP LIFE INSURANCE Insured: __________________________________________________________________________________________ Coverage Amount: $ _________________________________ Cost: $ ____________________________________ Is it portable?  yes  no Are there conversion privileges?  yes  no INDIVIDUAL LIFE INSURANCE Insured: ____________________________________________ Insured: _____________________________________ Type: ______________________________________________ Type: _______________________________________ Face Amount: _______________________________________ Face Amount: ________________________________ Issue Date: _________________________________________ Issue Date: __________________________________ Loan Amount, if any: _________________________________ Loan Amount, if any: __________________________ MULTIPLES OF INCOME Something else to consider is the calculation used by Ameritas to determine the maximum amount of insurance appropriate to replace an individual’s reported income. For a non-working spouse, amounts up to an equal amount of coverage on the working spouse will be considered. 18-40 41-50 51-60

The Most Common Causes of Disability

61-65

Ameritas also provides a letter for you to include that discusses the importance of DI and reminds the client of your meeting date.

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25 20

Maximum amount of coverage:

15 10

66-70

5

70+

Individual Consideration

This chart is intended to be used as a guideline only and is subject to individual underwriter discretion.

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In approved states, DInamic Foundation (forms 4501NC, 4502GR and 4503NCBOE) and DInamic Fundamental® (form 4504LS) are issued by Ameritas Life Insurance Corp. In New York, DInamic Foundation (forms 5501-NC, 5502-GR and 5503-NCBOE) and DInamic Fundamental® (form 5504-LS) are issued by Ameritas Life Insurance Corp. of New York. Policy and riders may vary and may not be available in all states. This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company, including, but not limited to, Ameritas Life Insurance Corp., located at 5900 O Street, Lincoln, NE 68510, Ameritas Life Insurance Corp. of New York, located at 1350 Broadway, Suite 2201, New York, New York 10018 and Ameritas Investment Corp, member FINRA/SIPC. Ameritas Life Insurance Corp. of New York is licensed in New York. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com. Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® and DInamic Fundamental® are registered service marks of affiliate Ameritas Holding Company. © 2015 Ameritas Mutual Holding Company For producer use only. Not for use with clients.