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Top Hat

And other Ways to “Show the Max!”. Top Hat. 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.

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Top Hat

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  1. And other Ways to “Show the Max!” Top Hat 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.

  2. How Much Disability Coverage is Enough?

  3. U.S. News and World Report • Nearly 40% of family budget = Mortgage • 25% to 35% toward minor things: • Food • Clothing • Bills • 65% to 75% of income is consumed just to live! Spending Patterns in the USA

  4. U.S. Bureau of Labor Statistics • 73,000,000 people surveyed • Survey indicated that 35% to 40% was allocated toward the mortgage. Spending Patterns in the USA

  5. What our Industry says is needed • 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%

  6. What our Industry says is needed • 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.

  7. If That Isn’t Enough What is the typical percentage used to insure group disability?

  8. So Let’s Review the Need • 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

  9. If 65% is the agreed upon number, why does the primary markets limit the coverage? 100 75 70 60 50 40 30 20 0 % Income Issued by Most Carriers The Need Line 75,000 150,000 300,000 500,000 1,000,000

  10. Not limited to just Personal Disability! • Buy-Sell • Business Overhead Expense • Key PersonWhat are the maximums from most carriers?? Excess Disability

  11. So How Do We Add Excess Disability Coverages?

  12. 4 Ways to Add Excess • Individual • Multi-Life • Group Excess • Top Hat

  13. Individual Coverages Uses: Personal and Business Coverages Excess, Supplemental and Primary Monthly Benefit Maximums 65% personally paid 75% corporate paid 5 x annual income for Lump Sum $$$ = Justification Benefit Period Maximum 1 to 5 years for personal coverage or Lump Sum Contract Period Maximum 5 years Occupational Limits None Underwriting Requirements Full

  14. Multi-Life Excess Disability Uses: Personal Excess, Supplemental and Primary Monthly Benefit Maximums $50,000/month 65% of income Benefit Period Maximum Up to 5 years for ages 18-59 Up to 3 years for ages 60+ Contract Period Maximum 3 years for ages 18 to 59 1 year 60+ Occupational Limits None Underwriting Requirements 2 or more = Discount only 5 + applicants = discount and application and CFS only

  15. Group Excess DisabilityGuaranteed Issue Monthly Benefit Maximums $50,000/month 65% of income Benefit Period Maximum Up to 5 years for ages 18-59 Up to 3 years for ages 60+ Contract Period Maximum 3 years for ages 18 to 59 1 year 60+ Participation and Size 100% and 10 minimum Underwriting Requirements Up to 50 lives - 3 years of group experience 51 to 99 lives – 2 year group experience 100+ - 1 year of group experience Pre-ex clause in effect

  16. Group Excess DisabilitySimplified Issue Monthly Benefit Maximums $50,000/month 65% of income Benefit Period Maximum Up to 5 years for ages 18-59 Up to 3 years for ages 60+ Contract Period Maximum 3 years for ages 18 to 59 1 year 60+ Minimum Participation and Size 5 Underwriting Requirements 2 years of group experience or short form app on eligible employees Pre-ex clause in effect

  17. Multi-Life and Group • Standard Benefits • Own Occupation • Presumptive • Recurrent • Options • Residual • COLA • Automatic Benefit Increase

  18. Top HatAutomatic Issue Monthly Benefit Maximums $10,000/month 65% of income Benefit Period Maximum 2 year and 5 year Contract Period Maximum 3 years Underwriting Requirement Signed and dated Top Hat application and authorization Copy of non-can DI policy issued within last 90 days

  19. Top Hat • 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

  20. Multiple Accesses to Excess DI • Individual Underwriting • Multi-life • Discounts • Underwriting considerations • Group Excess • Guaranteed issue • Guaranteed-to issue (simplified issue) • Top Hat • Automatic issue

  21. And other Ways to “Show the Max!” Top Hat 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.

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