Why DI? Why your clients need it Why you should sell it Why your clients need it Why you should sell it Leading Edge Disability Center (888) 677-6575

Why DI?Why DI?Why DI?Why DI?

Why your clients need itWhy your clients need it

Why you should sell it Why you should sell it

Why your clients need itWhy your clients need it

Why you should sell it Why you should sell it

Leading Edge Disability Center

(888) 677-6575 www.disabilitycenter.com

Of all the risks you take, if you could Of all the risks you take, if you could only protect yourself against one, would only protect yourself against one, would

it be:it be:

the one most likely to occur? the one most likely to occur? oror

the one that if it were to occur, could the one that if it were to occur, could produce the greatest financial loss? produce the greatest financial loss?

Leading Edge Disability Center (888) 677-6575 www.disabilitycenter.com


1 in 1,3001 in 1,300 1 in 70 1 in 70

1 in 1091 in 109 1 in 81 in 8

Comparative Insurance Comparative Insurance Usages In A Given YearUsages In A Given YearComparative Insurance Comparative Insurance Usages In A Given YearUsages In A Given Year

LifeLife DIDI

Sources:Transactions. Society of ActuariesCommissioners Disability TableDeath – National Center for Health StatisticsFire & Motor Vehicle – Accident Facts. National Safety Council



Protect Your Most Protect Your Most Valuable AssetValuable Asset

Protect Your Most Protect Your Most Valuable AssetValuable Asset

CurrentCurrent AgeAge

$25,000$25,000 $35,000$35,000 $50,000$50,000 $60,000$60,000 $100,000$100,000 $125,000$125,000 $150,000$150,000

3030 875,000875,000 1,225,0001,225,000 1,750,0001,750,000 2,100,0002,100,000 3,500,0003,500,000 4,375,0004,375,000 5,250,0005,250,000

3535 750,000750,000 1,050,0001,050,000 1,500,0001,500,000 1,800,0001,800,000 3,000,0003,000,000 3,750,0003,750,000 4,500,0004,500,000

4040 625,000625,000 875,000875,000 1,250,0001,250,000 1,500,0001,500,000 2,500,0002,500,000 3,125,0003,125,000 3,750,0003,750,000

4545 500,000500,000 700,000700,000 1,000,0001,000,000 1,200,0001,200,000 2,000,0002,000,000 2,500,0002,500,000 3,000,0003,000,000

5050 375,000375,000 525,000525,000 750,000750,000 900,000900,000 1,500,0001,500,000 1,875,0001,875,000 2,250,0002,250,000

5555 250,000250,000 350,000350,000 500,000500,000 600,000600,000 1,000,0001,000,000 1,250,0001,250,000 1,500,0001,500,000

6060 125,000125,000 175,000175,000 250,000250,000 300,000300,000 500,000500,000 625,000625,000 750,000750,000

Average Income to Age 65Average Income to Age 65



Why Don’t People Buy DI?Why Don’t People Buy DI?

No one ever thinks they are going to No one ever thinks they are going to become “disabled,” which in their minds become “disabled,” which in their minds means: means:



Don’t Use “Disability”Don’t Use “Disability”Don’t Use “Disability”Don’t Use “Disability”

Propose a new phrase Propose a new phrase

–– “ “Too sick or hurt to work”Too sick or hurt to work”



UCL Major Causes of Disabilities UCL Major Causes of Disabilities 1995 - 20001995 - 2000

UCL Major Causes of Disabilities UCL Major Causes of Disabilities 1995 - 20001995 - 2000

22%

20%

13%11%

9%

7%

6%3% 3% 6%

Musculoskeletal Disorders Injury & Poisoning

Mental Disorders Cancer - All Kinds

Circulatory Disorders Genitourinary Disorders

Nervous System Disorders Digestive Disorders

Endocrine, Nutritional, Metabolic Miscellaneous



Types of DisabilitiesTypes of DisabilitiesTypes of DisabilitiesTypes of Disabilities

Total Total then partial then partial then recovered then recovered (i.e. heart attack)(i.e. heart attack)

Partial Partial then total then total then death then death(i.e. cancer)(i.e. cancer)

Partial Partial stay partial stay partial(i.e. bad back)(i.e. bad back)

Total Total stay total stay total (i.e. auto accident causing permanent paralysis)(i.e. auto accident causing permanent paralysis)



Types of DisabilitiesTypes of DisabilitiesTypes of DisabilitiesTypes of Disabilities

Dead

Proceed with caution

Proceed as normal



The Good News and Bad NewsThe Good News and Bad NewsThe Good News and Bad NewsThe Good News and Bad News

Good NewsGood News

People are People are living longer.living longer.

Bad NewsBad News

Diseases that used to Diseases that used to cause death are now cause death are now leaving people disabled.leaving people disabled.



Disability On the RiseDisability On the RiseDisability On the RiseDisability On the Rise

70%44% 36% 36%

55%

-73%

-29%-48%

-27% -32%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Death

Disability

Hypertension

Cerebrovascular

DiabetesAll

Four

HeartDiseases

Source: National Center for Health Statistics - 1999

DisabilityDeath



Everything Rests on IncomeEverything Rests on IncomeEverything Rests on IncomeEverything Rests on Income



Who Buys DI?Who Buys DI?Who Buys DI?Who Buys DI?

DoctorsDoctors

LawyersLawyers

Business OwnersBusiness Owners

ExecutivesExecutives



0

5

10

15

20

25

Prof. Mangers MiddleIncome

Per

cen

tag

e o

f P

enet

rati

on

Market PotentialMarket Potential

Source: Provident; Bear, Steams & Co. Inc. Report, 1998

Estimated Individual DI market size and penetration

78

Marketing OpportunityMarketing OpportunityMarketing OpportunityMarketing Opportunity

Millio

ns o

f Peo

ple

Penetration (Left scale)Market Size (Right scale)

0

5

10

15

20



0

10

20

30

40

50

60

70

80

90

Physicians Dentists Attorneys Corp. Execs Prof. Managers MiddleIncome

Pe

rce

nt

of

Pe

ne

tra

tio

n


Individual Disability Market Penetration by ProfessionIndividual Disability Market Penetration by Profession

Source: UnumProvident; The Guide of Understanding the Life Insurance Industry Banc of America Securities Inc. 2001




Every 1.3 seconds someone becomes a hospital patient.

Every 3.3 seconds someone is disabled for a day or longer.

Every 7.5 seconds someone is disabled in the home.

Every 15.6 seconds someone is disabled at work.

0

2

4

6

8

10

12

14

16

Likelihood of becoming disabledLikelihood of becoming disabled

Source: Jim McCarty CLU, RHU, LUTCF, Above Source: Jim McCarty CLU, RHU, LUTCF, Above the Line: Scorching Strategies for Sizzlin’ Sales the Line: Scorching Strategies for Sizzlin’ Sales Success, 1988.Success, 1988.



0%

10%

20%

30%

40%

50%

5 - 9 10 - 24 25 - 99 100 - 999

Individual Only

Group Only

Both

Number of Employees

% o

f C

om

pan

ies

Pro

vid

ing

E

mp

loye

e D

isab

ilit

y C

ove

rag

e


Source: Response Analysis Corporation,1994



DI is discussed in only 36% of all DI is discussed in only 36% of all insurance discussions. insurance discussions.

Just ASK!Just ASK!

Source: 2000 LIMRA International, Inc.




Top 10 Companies Selling Top 10 Companies Selling Noncancellable DINoncancellable DI

Top 10 Companies Selling Top 10 Companies Selling Noncancellable DINoncancellable DI

1. Unum/Provident1. Unum/Provident 6. IDS Life 6. IDS Life

2. Guardian Life2. Guardian Life 7. Principal 7. Principal

3. Mass Mutual Life3. Mass Mutual Life 8. Union Central 8. Union Central

4. Northwestern Mutual Life4. Northwestern Mutual Life 9. Combined of America 9. Combined of America

5. Met/NEF5. Met/NEF 10. Standard of Oregon10. Standard of Oregon

Source: 2002 LIMRA International, Inc., First quarter year-to-date. (Based on 18 participating companies.)



DedicationDedicationDedicationDedication

Union Central is dedicated to selling DI.Union Central is dedicated to selling DI.



PersistencyPersistencyPersistencyPersistency

Due to the level premium structure of Due to the level premium structure of

noncancellable DI, once a policy has noncancellable DI, once a policy has

been in force for several years, it is less been in force for several years, it is less

likely to be replaced. likely to be replaced.



Current rates at a given age for $1000 of Current rates at a given age for $1000 of

basic coverage basic coverage

AgeAge Annual Premium Annual Premium

2525 $244.90$244.90

3535 $346.80$346.80

4545 $553.90$553.90

5555 $764.30$764.30

PersistencyPersistencyPersistencyPersistency



CompensationCompensationCompensationCompensation

Disability insurance has a strong FYC Disability insurance has a strong FYC as well as an impressive renewal and as well as an impressive renewal and bonus program. bonus program.

Over time, selling DI is very profitable.Over time, selling DI is very profitable.



YearYear DI Renewal (10%) + DI Renewal (10%) + Bonus (5%)Bonus (5%)

Life Renewal Life Renewal (2%)(2%)

11 $0 $0 $0$0

22 $3,075$3,075 $600$600

33 $6,150$6,150 $1,200$1,200

44 $9,225$9,225 $1,800$1,800

55 $12,300$12,300 $2,400$2,400

66 $15,375$15,375 $3,000$3,000

77 $18,450$18,450 $3,600$3,600

88 $21,525$21,525 $4,200$4,200

99 $24,600$24,600 $4,800$4,800

1010 $27,675$27,675 $5,400$5,400

TotalTotal $138,375$138,375 $27,000$27,000

CompensationCompensationCompensationCompensation

Assumes $30,000 premium/year; 100% persistency

Note: DI and Life FYC over this time period = $150,000 each



Repeat BusinessRepeat BusinessRepeat BusinessRepeat Business

As a person’s income increases, the As a person’s income increases, the need to add more DI increases as well. need to add more DI increases as well.

Guaranteed Physical Insurance Rider Guaranteed Physical Insurance Rider (GPIR) allows your client to purchase (GPIR) allows your client to purchase those increases. those increases.



“ “While most individuals will protect themselves While most individuals will protect themselves from the loss of personal property, few consider from the loss of personal property, few consider the consequences of losing the ability to earn a the consequences of losing the ability to earn a living.”living.”

— — Associated Press Online Associated Press Online 2/992/99

Experts recommend buying DIExperts recommend buying DI Experts recommend buying DIExperts recommend buying DI




“ “Before worrying about savings, one had better Before worrying about savings, one had better protect their income.”protect their income.” — U.S.A. Today 7/86 — U.S.A. Today 7/86




“ “Disability insurance may be a family’s Disability insurance may be a family’s

only protection against financial ruin.”only protection against financial ruin.”

— — Wall Street Journal Wall Street Journal 12/85 12/85



Professional LiabilityProfessional LiabilityProfessional LiabilityProfessional Liability

Agents who present themselves as Agents who present themselves as

“financial planners” but don’t discuss “financial planners” but don’t discuss

DI may be held liable for uninsured DI may be held liable for uninsured

losses. losses.



ConclusionsConclusionsConclusionsConclusions

There is a need to protect people’s income.There is a need to protect people’s income.

Relatively few companies and agents areRelatively few companies and agents are

offering disability income. offering disability income.

There are great financial rewards for sellingThere are great financial rewards for selling

disability income. disability income.

Union Central has a great product.Union Central has a great product.

All you need to do is – All you need to do is – Just Ask!Just Ask!



Documents

Why DI? Why your clients need it Why you should sell it Why your clients need it Why you should sell it Leading Edge Disability Center (888) 677-6575