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why DI? why now?
DI1286 1-14 For Producer use only. Not for use with clients.
disclosures
• In approved states, DInamic Foundation (forms 4501NC, 4502GR and 4503BOE) is issued by Ameritas Life Insurance Corp. located at 5900 O Street, Lincoln, NE 68510. In New York, DInamic Foundation (forms 5501-NC, 5502-GR and 5503-BOE) is issued by Ameritas Life Insurance Corp. of New York located at 1350 Broadway, Suite 2201, New York, NY 10018. 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., Ameritas Life Insurance Corp. of New York and Ameritas Investment Corp., member FINRA/SIPC. Ameritas Life Insurance Corp. is not 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® is a registered service mark of affiliate Ameritas Holding Company. © 2014 Ameritas Mutual Holding Company
DI1286 1-14 For Producer use only. Not for use with clients.
For Producer use only. Not for use with clients.
everything rests on income
DI1286 1-14
For Producer use only. Not for use with clients.
income potential at risk
Average Income to Age 67*
Current Age
$50,000/yr
$75,000/yr $100,000/yr $150,000/yr $200,000/yr $250,000/yr $300,000/yr
30 $1,850,000 $2,775,000 $3,700,000 $5,550,000 $7,400,000 $9,250,000 $11,100,000
35 $1,600,000 $2,400,000 $3,200,000 $4,800,000 $6,400,000 $8,000,000 $9,600,000
40 $1,350,000 $2,025,000 $2,700,000 $4,050,000 $5,400,000 $6,750,000 $8,100,000
45 $1,100,000 $1,650,000 $2,200,000 $3,300,000 $4,400,000 $5,500,000 $6,600,000
50 $850,000 $1,275,000 $1,700,000 $2,550,000 $3,400,000 $4,250,000 $5,100,000
55 $600,000 $900,000 $1,200,000 $1,800,000 $2,400,000 $3,000,000 $3,600,000
60 $350,000 $525,000 $700,000 $1,050,000 $1,400,000 $1,750,000 $2,100,000
*This does not take into account any raises, bonuses or other salary increases that may occur.
DI1286 1-14
For Producer use only. Not for use with clients.
potential lost earnings due to disability
Loss of Lifetime Earnings
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Age 35 Age 45 Age 55
$25,000 $50,000 $100,000
Income
Age at DisabilityDI1286 1-14
For Producer use only. Not for use with clients.
disability would disrupt retirement savings
0
200000
400000
600000
800000
1000000
Age 35 $25,000
Age 35 $50,000
Age 35 $100,000
Employee FundedEmployer Funded
Source: U.S. Census Bureau, 2009
Retirement Savings
DI1286 1-14
For Producer use only. Not for use with clients.
average savings by age of head of household
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Savings Value
Lessthan35
35-44 45-54 55-64 65-74 75 ormore
Age
Average Savings By Age
Mean
Median
Survey of Consumer Finances, Federal Reserve System, 2009
DI1286 1-14
For Producer use only. Not for use with clients.
workers’ savings only last a limited period of time
Average # ofMonth’sIn Pre-DisabilityIncome Saved
0
1
2
3
4
5
6
7
Age 35 Age 45 Age 55
$100,000 $50,000 $25,000
Source: U.S. Census Bureau Survey of Income Program and Participation, 2009.
Income
DI1286 1-14
For Producer use only. Not for use with clients.
most Americans are ignorant on social security DI requirements*
• Five full months of total disability required before benefits are payable.
• Expectation of total disability for life, or expectation of death within 12 months.
• Definition of disability is the inability to engage in any ‘substantial gainful activity.’
• Administrative process can last months or years.
* Online Social Security Handbook
DI1286 1-14
For Producer use only. Not for use with clients.
SSDI benefits do not replace enough pre-disability income
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$25,000 $50,000 $100,000
Annual Lost IncomeAnnual SSDI Benefits
Poverty Level – Family of 4 for 2011 ($22,350)
Source: Federal Register, Vol. 76, No. 13, January 20, 2011, pp. 3637-3638
SS Avg for 2011 ($22,704/yr)
DI1286 1-14
For Producer use only. Not for use with clients.
what is the ‘average’ duration for long-term disability?
0
10
20
30
40
50
60
70
80
Odds
25 35 45 55
Age
Odds of Being Disabled for an Extended Period
Percentage Still Disabled at the End of 2 years and 90 Days
Percentage Still Disabled at the End of 5 years and 90 Days
Source: 2010 Guide to Estate, Employee & Business Planning, by Donald Cady
DI1286 1-14
For Producer use only. Not for use with clients.
which odds are greater? death or disability?
0
1
2
3
4
5
6
7
8
Number of Times More Likely to
Become Disabled vs Dying
30 40 50
Age
Male
Female
Source: 2010 Guide to Estate, Employee & Business Planning, by Donald Cady
DI1286 1-14
For Producer use only. Not for use with clients.
the need has never been greater
• At no working age (30-50) are the odds of death greater than disability.
• The younger the individual, the greater the odds of a disability occurring during their working career.
Source: 2010 Field Guide to Estate, Employee & Business Planning, by Donald F. Cady, Copyright 2010, The National Underwriter Company.
DI1286 1-14
For Producer use only. Not for use with clients.
odds of becoming disabled during a working career
Source: 2010 Guide to Estate, Employee & Business Planning, by Donald Cady
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Odds
30 35 40 45 50
Age of Each Person
Chances out of 1,000 That at Least One Long-Term (90 day) Disability Will Occur Before Age 65
To Any 1 Person
To Any 1 out of 2 People
To Any 1 out of 3 People
DI1286 1-14
For Producer use only. Not for use with clients.
source of disabilities
Source: Gen Re, U.S. Group Disability Rate & Risk Management Survey, 2010
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2009
2007
2005
DI1286 1-14
For Producer use only. Not for use with clients.
why now?
• Cost of Disability Insurance is low compared to other insurance needs.
• Need may be greater than life insurance and other “traditionally” purchased insurance programs.
• Workers are at risk of losing their ability to clothe, feed, or house themselves.
DI1286 1-14
For Producer use only. Not for use with clients.
who is buying disability income insurance?
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2002 2003 2004 2005 2006 2007 2008 2009
Doctors Dentists Law yers Executives Accountants
4th Annual Survey of U.S. Individual Income Insurance Market, Milliman, Oct 2010
DI1286 1-14
For Producer use only. Not for use with clients.
Number of Employees
% o
f C
om
pan
ies
Pro
vid
ing
E
mp
loye
e D
isab
ility
C
ove
rag
e
Source: Response Analysis Corporation,1994
marketing opportunity
DI1286 1-14
For Producer use only. Not for use with clients.
many employees think the majority of disability claims are work-related
• Three times as many disabling injuries occur off-the-job versus on-the-job (2.9-1).1
• Nearly three-fourths of the disabling injuries suffered by workers in 2008 occurred off-the-job.1
• Less than 5% of disabling accidents and illnesses are work related.2
1. National Safety Council, Injury Facts, 2010 Edition2. 2011 CDA Long-Term Claims Review
DI1286 1-14
For Producer use only. Not for use with clients.
employees access to group short and long-term disability coverage
24%
18%
36%
27%
47%
36%
62%
60%
0%
10%
20%
30%
40%
50%
60%
70%
1-49 ee 50-99 ee 100-499 ee 500+ ee
# of Employees in Firm
Where Your Client Works May Determine If They Have Access To Disability Coverage
STD LTD
Source: July 2009, U.S. Department of Labor Statistics (full-time employees only)
DI1286 1-14
For Producer use only. Not for use with clients.
most smaller employers do not offer LTD benefits
25%
45%
76%87% 90%
95%
0102030405060708090
100
10-99 20-99 100-499 500-999 1,000-4,999
5000+
Percent (%)
Size of Company – Number of Employees
Source: LIMRA, “The Changing Group Insurance and Healthcare Marketplace,” 2003
DI1286 1-14
For Producer use only. Not for use with clients.
what is the actual access to disability benefits?
Source: U.S. Department of Labor, Bureau of Labor Statistics, 2009.
39%
33%
52%
58%
23%
13%
37%
32%
37%
23%
48%
28%
0%
10%
20%
30%
40%
50%
60%
All Workers Management,professionaland related
Service Sales andoffice
Naturalresources,
constructionand
maintenance
Production,transportionand material
moving
STD LTD
DI1286 1-14
For Producer use only. Not for use with clients.
how to join the cause
• Ask your personal clients or employer clients about their disability plans
• If personal clients, ask “how would you pay your bills if your paycheck stopped?”
• If they say they “have it at work,” ask them to get you a copy of their plan.
• If employer clients, ask them if they have a plan.
• If they say they don’t, ask them “how they have dealt or will deal with the disability of an employee.”
• If they have paid a disabled employee, ask them if they at least have a Salary Continuation Plan. If not, they could have established a precedent they are uncomfortable with for all future claims.
DI1286 1-14
For Producer use only. Not for use with clients.
types of disability coverage
• Employer-funded short-term
• Usually self-funded and short in duration.
• Short-Term Disability
• Typically provided by an insurance carrier.
• Plans typically have short elimination periods and relatively short benefit periods.
• 0/7-day or 1/8-day elimination periods
• 13- or 26-week duration
• Sold as a benefit per week, i.e.., 60% to $500
DI1286 1-14
For Producer use only. Not for use with clients.
types of disability coverage (cont.)
• Long-Term Disability
• Typically provided by an insurance carrier
• Plans should coordinate with underlying STD
• 90- or 180-day elimination period
• RBD, age 65, five years or two years
• Sold as a benefit per month, i.e.., 60% to $5,000
• Individuals with higher incomes, income outside of base salary, etc., could find themselves “underinsured.”
• DInamic FundamentalSM (offered in U.S. only by Ameritas®)
• Single, lump sum benefit (based on annual earnings) payable upon claim approval. Policy then terminates.
• Simple, affordable and attainable DI coverage targeting middle income Americans
DI1286 1-14
For Producer use only. Not for use with clients.
reverse discrimination
$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000
$10,000$11,000$12,000
$24,000 $48,000 $120,000 $240,000
60% of Income
LTD CoverageMonthly Benefit
Monthly Income
$5,000/m maximum
LTD Plan of 60% of Salary, 90 E.P., $5,000 maximum
DI1286 1-14
For Producer use only. Not for use with clients.
how to learn more?
• FA 211 “Essentials of Disability Insurance” through The American College and the International Disability Society (IDS)
• Disability Income Advisor (DIA) thru AHIP
• Jeff Sadler’s “How to Sell Disability Insurance”
• Allan Checkoway and Harry Lew’s “Disability Income Insurance”
• Ongoing Ameritas® sales and marketing presentations
DI1286 1-14
upcoming DI teleuniversities
DI1286 1-14 For Producer use only. Not for use with clients.
key contacts
• Your agency or brokerage manager
• Your Ameritas® sales development team
• Your GSI regional director
• The DI product management team
For Producer use only. Not for use with clients.DI1286 1-14