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DI Can Protect Your Client’s Paycheck — and Increase Yours Selling DI to the Corporate Client

DI Can Protect Your Client’s Paycheck — and Increase Yours Selling DI to the Corporate Client. Presented By:. Branden Pierson, Unum Keith Hoffman, NFP Kat Freeman, NFP. Agenda. Disability Insurance Awareness Month Campaign Multi-Life Disability 101 DI Sales Ideas NFP DI Resources.

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DI Can Protect Your Client’s Paycheck — and Increase Yours Selling DI to the Corporate Client

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  1. DI Can Protect Your Client’s Paycheck — and Increase YoursSelling DI to the Corporate Client Presented By: Branden Pierson, Unum Keith Hoffman, NFP Kat Freeman, NFP

  2. Agenda • Disability Insurance Awareness Month Campaign • Multi-Life Disability 101 • DI Sales Ideas • NFP DI Resources

  3. Disability Insurance Awareness Month http://go.nfp.com/diam

  4. Top 5 Reasons to Sell Individual Disability Insurance

  5. Multi-Life Disability 101

  6. Industry Snapshot:Multi-Life Sales Trends – “Back in Black” UNUM = +33% Growth W/O Unum = 7.5% Growth • Unum Growth Drivers: • Large New Case Sales • Industry Diversification • 1/3 ER Paid, 2/3 Voluntary • Pent up demand from 09/10? • Inforce block yield improvement but not pre-recession level. “New Normal?” • Up sell on inforce block • GSI • Tier 2 Expansions • New hires, earnings increases • The Great Recession Impacts to Multi-Life: Unum’s Experience • Inforce Block Yield drop due to unemployment / earnings decreases • New large case sales: Executive comp scrutiny / “Cuts not benefit adds” • ER paid plan persistency drop / EE pay persistency fairly stable • Stayed the course: small/mid new case sales

  7. Multi-life IDI leadership Unum has 16,406 inforcemulti-life IDI customers2 26%penetration3 18%penetration4 Opportunity! 1 LIMRA, “2010 U.S. Individual Disability Income Inforce Total Multi-life,” 2011. 2 Unum IDI Database as of December 31, 2010. 3,4 Unum IDI Database as of March 31, 2011.

  8. Multi-life IDI leadership – Full Year 2011 *LIMRA, “2011 U.S. Total Multi-life IDI Income Issues,” 2011.

  9. The ER sponsored multi-life market Penetration: 30% of Fortune 1000 has ER sponsored IDI Unum’s Focus on the ER Sponsored Multi-life Market 99.5% of Sales are in the ER Sponsored ML segment 85% of our sales are Guaranteed Standard Issue New variables that are expanding the ER sponsored market Innovation: Communication, Education, Enrollment for Multi-life Distribution: Revenue growth and diversification for benefit producers Evolution: Products and Uwing that are more user-friendly than the past The ER Sponsored Multi-Life Market 10

  10. Unum Multi-Life IDI:New Case Industry Trends • Notable Trends: • Health Care Services driven healthcare reform physician plans • Financial services increase • Law firms retooling/upgrading existing plans vs. new plans

  11. Why Supplemental Multilife Disability for Brokers? Most employers and employees do not know their current exposure • Solves problems • Strengthens the relationship Diversification and growth(vested revenue) Keeps other brokers out Supplemental disability is one of the most popular voluntary products among employers

  12. Why invest your time ? Revenue Growth from within……….. Assumptions*: Produce $65,000 of premium year 1, then 10% growth years 2-10 Multi-Life IDI compensation is 100% Vested * Business Mix can increase or decrease the above

  13. Vested Compensation 10 Year View Building the Renewal Stream

  14. Group Long Term Disability Individual Disability Income (IDI) • Economies of Scale, ER owned • Designed for masses • Variable rate structure • Individually owned, provided through ER • Value added, customized • Pooled, level-rate structure Integrated Group and Individual Disability Coverage Objective Utilize group and individual product platforms to create a more effective integrated disability insurance program

  15. Supplemental Multi-life Income Protection Evaluation Information Needs: LTD Plan, Total Comp Census, Plan Experience • SHORTFALLS & GAPS -(Exposing the employee need) • Benefit maximums • Taxability of benefits Size Segment Appeals To EE/ER All size • Uninsured earnings • Incentive (Bonus, Commission) • Deferred comp, RSU, Retirement • RISK TRANSFER - (Employer risk diversification) • Reduce plan exposure and experience volatility • COST SHIFT / PLAN AND FUNDING REDESIGN Large case: Medium to high credibility Appeals To ER • VALUE OF OFFERING • Benefit education • Enrollment and communication • Benefit features • - Portable/LTC/CAT Appeals To EE/ER • ER Sponsored Leverage (Discount / GSI Uwing) • Retain and attract • Customization All size

  16. Employee Population $800,000 $700,000 $600,000 $500,000 Earnings $400,000 $300,000 $200,000 $100,000 $0 25 30 35 40 45 50 55 60 65 70 Age Above LTD Plan Maximum Below LTD Plan Maximum Why Multi-Life IDI? Need Shortfall & gap illustrated Assume 60% to $15,000 LTD plan LTD Plan Max Concern: Income replacement shortfall due to benefit maximum

  17. Why Multi-Life IDI? Need Shortfall & gap illustrated Assume 60% to 15K LTD plan This column represents theNET after-taxincome replacement. *Tax assumption − 28%

  18. Income replacement by taxability of benefits • If LTD and IDI are both non-taxable (generally employee-paid), the total replacement is limited to 60% • If LTD and IDI are both taxable (generally employer-paid), total replacement can be up to 75% • If LTD is taxable and IDI is non-taxable (generally employee-paid), 75% replacementappliesfor the majority of cases. • This may be lower if non-taxable benefit outweighs the taxable benefit on a dollar basis.

  19. Group LTD + IDI: Buy-up Cost-effective disability coverage that supplements LTD income protection 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% • Guaranteed exchange for long term care policy (optional for 675 and 750 products) • $3000 per month • Home care benefits • 6-year benefit period • Between ages 60–70 Catastrophic disability 25% to a monthly maximum of $10,000 % Income replacement 75%, less group LTD, to a monthly maximum of $XX,000 IDI Wage continuation or STD GroupLTD 60% to a monthly maximum of $XX,000 Time line 180 Days Age 65

  20. Group LTD + IDI: Combination plan • Combines cost-effective group LTD with the non-cancellable feature of IDI to provide executives with comprehensive coverage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% • Guaranteed exchange for long term care policy (optional for 675 and 750 products) • $3000/month • Home care benefits • 6-year benefit period • Between ages 60–70 Catastrophic disability 40% to $10,000 monthly maximum % Income replacement Wage continuation or STD 10% to a monthly maximum of $XX,000 IDI GroupLTD 50% to a maximum monthly benefit of $XX,000 Time line 180 Days Age 65

  21. Ideal factors for GSI plans Employer-paid & 100% • Higher Earnings • Five or more employees earning $75,000 or more • Income Replacement shortfalls • 60% or lower replacement ratio • A cap of $10,000 or less on incomes that call for higher amounts • Risk transfer • Greater than a 60% replacement ratio • LTD maximums greater than $15,000 • Defined group/carve out − white collar executives • Basic Monthly Earnings (BME) that excludes variable compensation Employee-paid plans • 50 or more employees earning $75,000 or more • 20% participation or a minimum of 10 lives, whichever is greater

  22. Highlight features of multi-life IDI • Return-to-work features: Recovery and work incentive benefit • Long term care exchange offers an asset protection feature (optional rider for Income Series 675/750) • Catastrophic disability benefit for more severe disabilities (optional) • Cannot be cancelled and contract cannot be changed • Level premiums to age 65 (option to age 67 for Income Series 750) • Individual ownership of policies – portable • No offsets with workers’ compensation, social security or other government programs • Multi-life discounted rate structure

  23. Enrollment support at every step A successful enrollment begins with: • Full support from the employer and the Human Resources department • An installation call before the enrollment – with the employer, implementation manager and enrollment manager • Successful strategy execution based on employee demographics and industry • Multiple contacts with employees and variedenrollment options to accommodate unique needs

  24. Steps to a successful enrollment Communicate Enroll Educate • Endorsement letter • Announcement communications • E-mail reminders • Personalized paper kits • Voice Signature Authorization (VSA) (paperless enrollment) • Self-enrollment via the web • Face-to-face enrollment • Informational website • Live informational sessions via the web • Q&A for web and paper enrollments • Inbound and outbound calls

  25. Enrollment methods and tools • Paper • Individualized kits provide personalized information and all forms necessary to enroll. Supports specialized programs and customer requests. • Assessment of need • Personalized rates • Endorsement letter from employer • Policy information • Toll-free number for assistance during enrollment staffed by licensed enrollment specialists • Web • plane.biz link e-mailed from Unum or provided on employer site. • Toll-free number for assistance during enrollment staffed by licensed enrollment specialists • Secure site protects employee privacy • Real-time tracking throughout enrollment • Can also include modified paper kit delivered to employee • Phone • Employees speak with enrollment specialists to choose a plan and enroll via Voice Signature Authorization (VSA) technology. • Educational website or paper kits supply detailed plan information • Implemented as part of paper or web-based enrollment strategy • Instant enrollment with the assistance of licensed enrollment specialists

  26. Value Story - Unum’s Disability Claims Model Our guiding principle is to provide a fair, thorough and objective review of all claims. • Highly skilled people • A customer-focused process • Protection for customers when they need us most We do this by adhering to the highest standards built on:

  27. Q & A

  28. Tips on How to Sell DI Say “Paycheck Protection.”  Don’t tell me what it is. Tell me what it does! Most people cannot envision being disabled but they can understand the importance of protecting the paycheck – their most important asset. Change your client’s perspective by using one key phrase - paycheck protection. Sell the Need for Disability Insurance with a Personal Story. Sell Disability Insurance to Business Owners. There are many good candidates for DI, but business owners need the most protection. Protect business owners’ paychecks with individual disability insurance along with a Business Overhead Expense (BOE) policy to protect the business. Only 5 percent of business owners have a Business Overhead Expense policy.

  29. NFP DI Capabilities & Resources • Multi Life DI Sales Center • Customizable Marketing Material • Income Analysis Tools • Request for Proposal System • Uconnect for DI • Impaired Risk Outlet • High Limit DI Outlet • Existing Coverage Reviews • Underwriting Advocacy • Claims Expertise • Point of Sale Assistance • Carrier and Product Information • Training & Education • NFP DI Partnerships

  30. The secret to selling Disability Insurance… You need to ask.

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