At first thought, accidental death insurance seems quite simplistic and obvious without the need for much explanation. However, you might be surprised at the number of inquiries we receive asking what exactly constitutes an accidental death. You may also be quite astonished to learn the true broad nature of the coverage and the many attributes of a relatively inexpensive accidental death insurance plan.
Amongst insurance policy definitions, the common verbiage dictates that an accidental death is a loss of life due to any reason other than natural causes; natural causes meaning disease or old age. Therefore, even if there is an intentional taking of life (apart from suicide and drug/alcohol overdose), not necessarily by accident, the loss is valid and insurable. Even most incidents of assault and murder would constitute a covered accidental death.
Other common claim scenarios arise due to slip and falls, accidental weapon wounds, car and motorcycle accidents, drowning, pedestrian and bicycle accidents, head traumas, work-related machinery malfunctions and plane crashes. In a world as busy and “travel centric” as ours is today, “accidental” death should be a real concern to most Americans.
Life insurance is the best first-step in mitigating risk due to accidental death, but term and permanent life platforms don’t always fit into every client’s equation. Cost is a major issue. The annual cost of an accidental death policy is a fraction of the annual premium associated with any version of life insurance. Insurability is also a factor. Many prospects who don’t qualify for traditional life insurance plans due to adverse health histories usually have the ability to qualify for an accidental death plan.
In the past 12 months, the ongoing pandemic has put a halt to the life insurance accessibility of many impaired-risk and older age Americans. Traditional life carriers are still not allowing life insurance underwriting for many with ongoing insurance needs. Standalone accidental death insurance is a proper, short-term alternative for those seeking death benefits when they are on-hold with domestic life companies.
We also frequently see accidental death insurance utilized for travel and business purposes. It has become commonly prescribed to clients wanting additional death benefits for business trips and family vacations both within and outside the United States.
Since 2001, war and terrorism coverage has become important for those working internationally. Petersen International’s accidental death program includes built-in coverage for acts of war and terror at no additional cost to the client, and we can cover U.S. residents traveling anywhere in the world including war zones and political hotspots. This versatile plan offers popular supplemental benefits such as dismemberment coverage and emergency medical evacuation insurance.
Considering the global dangers brought about by underdeveloped and developing infrastructures and technology platforms as well as the widespread heinous acts of criminals and terrorists, accidental death insurance should be a logical consideration of every American no matter where they live or travel. For insurance quotes and more information, contact us at (800)345-8816.xxx
Capital lending and finance make the world go round. Whether it be personal real estate, automobiles or business expenses, most Americans finance their entire way of life by accepting money from professional lenders with the promise of repayment including interest. Public and private companies regularly utilize business loans to start, run and enhance themselves. Business loans are commonly used for franchise start-ups, lines of credit, working capital, small business start-ups, mergers and acquisitions, construction financing, real estate purchases and equipment financing.
When a bank or other institution lends money to a business, the lender typically requires collateralized life insurance, but we are seeing emerging trends of the borrower making further demands of loan recipients to provide proof of disability insurance equaling the amount of the loan repayments. This provides comfort to the lender that should the borrower ever become sick or injured and unable to work, the loan repayment will proceed on time. The preferred method of addressing the lender’s insurance requirement is the prescription of comprehensive, “own-occupation” disability insurance that provides repayment of the monthly loan schedule and/or a lump sum payoff of the remaining loan balance.
This can be achieved in several ways, but not all solutions are created equal.
A common solution used by unwitting consumers is the appropriation of personal disability benefits for assignment to the lender. Many clients use their own personal income protection policies to satisfy business loan requirements. This is a great folly of the DI insurance world. A business owner should never assign personal benefits to satisfy a loan agreement while all the while putting his or her own family’s financial protection in jeopardy. Advise your clients to leave their personal DI coverage alone.
A more common avenue taken by insurance advisors is the prescription of Business Overhead Expense (BOE) insurance to indemnify business loan agreements. However, this too creates great real-world problems. BOE policies have a maximum benefit period of only 12 to 24 months which is usually insufficient to most business loans which commonly have durations of ten years or longer. More importantly, BOE plans only cover the interest on business loans, leaving principal payments completely uninsured.
The third and most proper option for borrowers is the purchase of a separate, loan-specific indemnification disability plan that protects independently from a client’s personal disability or BOE policies. Petersen International offers the Loan Indemnification Disability plan which is designed to satisfy a lender’s insurance requirements so that there is 100% complete financial protection of both the principal and interest, allowing the loan to close without any unnecessary delays.
The product provides customized declining benefit structures to meet the repayment schedules and stipulations of any loan agreement whether it be monthly benefits, lump sum benefits or a combination of the two. Petersen’s loan DI policy allows for complete financial indemnification of a client’s loan in case of unforeseen disablement, leaving their other important personal and business disability coverage intact.xxx
It often seems to many of us that, by necessity or not, we will have to work until we are dead and buried in the ground. Obviously, that is an overstatement of the truth, but in reality, most Americans retire by the age of 70. Now that number has increased over the last several decades due to a multitude of factors (improvement in healthcare, increased longevity, lack of retirement planning confidence, fear of outliving resources, etc.) Eventually, most of us make that decision to retire, and the business owners out there will most likely either close-up shop or pass the reigns to a successor. Succession planning is vital in maintaining business continuity and balance when an owner decides to finally hang it up and enter a life of leisure.
But how do you avoid impending financial chaos during a regime change and the partial or entire sale of a thriving business? You employ a thoughtfully constructed, fully-funded buy/sell agreement, outlining the procedural turnover of the business to one or more individuals. This is the natural and proper action as long as life runs smoothly and expected. But we all know that life can throw unexpected curveballs like accidents and illnesses which lead to the permanent disablement of the business owner, forcing a premature buy-out of the business.
In most instances of unforeseen disability, successors won’t have the capital necessary to fully-fund the purchase of the disabled owner’s shares. Chaos ensues and the business suffers or defaults. The solution is buy/sell disability insurance. A comprehensive buy/sell DI policy will properly fund a purchase agreement at the time of permanent disability of an owner through a lump sum or structured monthly benefit to sufficiently address the monetary needs of the buy/sell contract. Benefits usually begin after a common elimination period of at least 12 months
Most domestic disability insurance carriers offer proper “own-occupation” disability policies designed to indemnify buy/sell agreements, but there are always shortcomings and fiduciary dangers that disability advisors must heed.
Traditional DI companies have limitations that preclude certain clients from sufficient coverage. Age limitations are common. Most policies either employ declining benefits once an insured person reaches the age of 60, or completely cease to offer any benefits to clients of that age or older. This is a great problem, considering persons over the age of 60 are more susceptible to disablement than their younger counterparts.
Benefit limitations in general are also common amongst domestic carriers. Rarely will a traditional buy/sell DI policy be able to provide funding over $1,000,000 even though the buy-out value of a company may be much higher. Excess or high-limit buy/sell coverage is frequently required and readily available through specialty markets.
Petersen International offers solutions to those unfortunate predicaments. High-limit buy/sell insurance is available through PIU in excess of the lower limits provided by traditional DI carriers. Furthermore, the benefits offered by PIU don’t dissolve once an insured person reaches the age of 60 or 65, and policies can be written on business owners over the age of 70. PIU is also able to offer buy/sell disability insurance to persons declined by domestic carriers due to impaired risk concerns such as health, occupation and avocation issues.
Please contact Petersen International at (800)345-8816 to learn more about our succession planning solutions and how we can minimize your clients’ corporate risk with unique insurance platforms.xxx
Millennials outnumber Baby Boomers in the United States by almost eight million and represent more than a quarter of the American population. Our greatest sources of prospective clientele now fall upon the youth and those nearing retirement – opposite ends of the spectrum. As an industry, specifically in the life and disability insurance markets, we must cater to both of those demographics if our businesses are to prosper. But how do we focus on groupings of persons who seem to be so different including their values, ideologies and lifestyles? We must wear different hats at different times. We must be flexible and embrace sometimes contradictory marketing methodologies.
Baby Boomers represent the politically and socially radical past of this country, but they have now moved into a new era in life. They have families and grandchildren. They have become more conservative, and while many of your older clients may have embraced much of today’s incredible technologies, marketing preferences, in general, remain antiquated among matured audiences. They remain preferential to reading magazines and newspapers they can hold in their hands, and they respond more to direct contact and face-to-face sales techniques. A Boomer is a true salesperson’s prospect. They are self-aware of their age, their limitations and their need for financial protection. Their way of thinking is more analytical and deliberate, but can also be very stubborn.
Millennials, on the other hand, are a completely different breed. They generally believe they are physically impervious to accidents and sickness. Furthermore, they were born with cell phones in their hands and computers at their fingertips. They are impatient and think they know everything, or at the very least they think they can do everything better than previous generations. And they are probably correct. They can certainly attain information faster than ever before, and they are intelligent; more young Americans have college educations than ever before. But most importantly, Millennials understand how to use and leverage technology better than their forefathers which makes them adept in employing social media and other electronic resources to communicate, find their news, do their shopping and research and purchase their insurance policies.
So there is the dilemma. We are faced with two completely different demographics of prospective clients, both of whom are well worth the trouble of going after. Are your current marketing strategies going to afford you the opportunity of targeting both the young and those nearing retirement? You must adapt. Remain a true insurance salesperson, but do so on multiple levels, in multiple mediums to multiple audiences.
That is the reality. We must continue to diversify our marketing and sales techniques to reach all available markets. To industry outsiders, much of our world of life and health insurance seems mundane and tired, and the future of this business will inevitably be focused on technology, ease and efficiency of policy issuance and delivery.
Millennials certainly represent the present and future of the U.S. economy, and they have changed the way much of the world conducts business. To achieve success in this industry, we must embrace and indulge in the preferences of both the young and the old. These continue to be intriguing and challenging times, but the future holds endless opportunities if you are resourceful and able to adapt.xxx
I can’t believe it’s December already. Despite the horrific year endured the world over, the months seemed to fly by. Although it felt like a quick year to me, I realize many have struggled physically and financially. Millions are out of work in this country with no definite end in sight. We are still at odds with this stubborn pandemic. Infection rates are rising all over the nation with the only bit of hope being a likely vaccine in the future. COVID-19 is still with us and is still killing Americans every day. I believe the road ahead will continue to be arduous and time consuming.
Coronavirus has turned many American industries upside down. Insurance markets are quickly hardening. Retail and entertainment sectors are constantly being forced to reorganize, shut-down and downsize. This terrible landscape is trickling throughout many U.S. companies large and small.
As the pandemic drags on, continued downsizing throughout most industries is inevitable, and severed employees must come to grips with the reality that the employer was ill-prepared or lacked the resources necessary to provide a successful future relationship. In good form and for possible liability relief, conscientious employers will provide comprehensive severance packages at the moment of termination to help the newly unemployed through the difficult transition.
American business severance agreements frequently include, but are not limited to the following: additional income in regularly scheduled terms of months or years, payment for unused vacation time or sick leave, stock options, retirement benefits and limited continuation of life, dental, medical and disability insurances.
Employee benefits are financially imperative to millions of Americans. Most have become economically dependent upon employer-sponsored insurances that not only serve to protect the covered employee, but may reach to protect that employee’s immediate family as well. Often taken for granted by those the programs benefit, the corporate expense of maintaining such employee benefits can be fiscally straining to any company, no matter the size. But as previously mentioned, dutiful employers may extend coverage through a severance arrangement. And therein lies the problem.
Group insurance carriers require the immediate removal of a severed employee from an employer-sponsored plan with the possible offer of conversion to individual coverage. Family or individual life, dental and medical insurance policies are available from any number of insurance companies. Disability coverage is the exception. Without future employment contracts in place, traditional disability carriers will not insure an unemployed person no matter how recently that person was terminated. Since most employers and severance agreement drafters are unaware of this dilemma, they frequently open themselves to great liability risks and threat of lawsuit.
Petersen International is able to assist employers, your business clients, in mitigating such liabilities and avoiding the unnecessary and potentially expensive need for self-insurance. The Petersen International Severance Disability Insurance Plan provides a severed employee with long-term monthly and lump sum disability benefits which can be sculpted to fit the requirements of a legal severance agreement.
It’s quite uncomfortable to contemplate loss of employment or the firing of an employee this year, especially during the holidays, but the need for corporate downsizing will continue according to economic forecasts. Contact us for more information about severance insurance for your business clients.xxx
Dr. T. is a 47-year-old board-certified cosmetic surgeon with a successful Beverly Hills, California practice. He specializes in rhinoplasty and facial reconstruction. His annual income was $2,200,000 which allowed for a very extravagant lifestyle – even for Los Angeles standards. He was a superstar of plastic surgery.
Fresh out of medical residency, Dr. T. picked-up a modest individual disability insurance policy of $10,000 per month. After a few years in private practice and savvy to the financial pressures and risks involved with running a successful business, the doctor later purchased an additional $20,000 of monthly coverage from a different U.S. disability carrier. But as his practice flourished and his income rose, he found that his two layers of personal DI coverage were simply not at all sufficient.
From his early days in medical school up to the present, he heard horror stories of colleagues losing their ability to work in their medical specialties, unable to generate previously enjoyed income levels. He realized he needed more income protection.
Petersen International was able to work with his insurance advisor and provide Dr. T. with an additional layer of $50,000 per month of specialty-specific, “own occupation” disability insurance with a 60-month benefit period followed by a permanent disability benefit of $5,000,000. His Petersen policy also provided a residual disability rider in case of a drop in income due to a nagging partial disablement.
In the seventh year of coverage, Dr. T. suffered tendon and nerve damage in his dominant hand after a kitchen-related injury at home. He immediately went on claim for total disablement after a three month elimination period and received the full monthly benefits of his various disability policies. The policy proceeds allowed him to maintain his household and cover much of the medical expenses not covered by his health insurance, including many hours of rehabilitation. He has been on the mend for a couple of years now and is back working, but at a diminished capacity. Luckily Dr. T. still enjoys the continued financial support of a residual disability benefit from his Petersen International insurance policy.xxx
Feeling a little or a lot cut-off from the world? Despite the political and social dramas being played out over all forms of media in recent months, life in the U.S. has been anything but familiar or inclusive since early 2020. The Coronavirus pandemic, daily local and national protests and the polarizing political scene have continued to make Americans feel detached from the norm this year.
Many of you are still working from home for peace of mind or to adhere to social distancing measures, and we have heard from numerous insurance offices that have opened, but are still working at partial staff as furloughs and layoffs continue.
What a year!
But through all of this, Petersen International doesn’t want you to feel alienated or uninformed regarding insurance markets that continue to prosper despite the problems and slowdowns spreading throughout many other industries and facets of life. More so now than ever, your clients need your financial guidance.
Resist complacency and misinformation. Stay connected and up-to-date with the goings on of the U.S. and international life and health markets. Don’t hesitate to drop us a line, give us a call or send us an email to find out what’s hot, what’s slowing down, what’s trending and where the future is heading.
We have in-house experts and regional representatives throughout the country happy to set up a conference call, Zoom meeting, video chat or even an in-person visit to catch-up with you, answer any questions and lend insight into what lines of business can help or hinder your practice during these tempestuous times.
Despite the continuous hardening of insurance markets the world over, outlooks in the specialty disability and life sectors remain very positive with upward trajectories. There is much to be excited about at Petersen International, and 2021 looks like it will be another monumental year for our specialty lines of business.
Give us a call ((800)345-8816) or send us an e-mail (email@example.com) if you are looking to set-up a virtual meeting with one of our specialists. Petersen is here for you.xxx
Times are tough in this world right now. Second and third waves of Coronavirus are putting much of Europe on new lockdowns and virus cases are spiking in the Midwest. Politically and socially, our country is showing great schisms, but from a business standpoint, I hope many of you rise every morning with at least a glint of optimism. Today will be better than the last. I will acquire more leads today, and I will close bigger and better deals. I will give extra effort to satisfy the constant demands of my business clients, and I will succeed. Something new will be brought to my table, and today will prove to be an exciting moment in my career. Well…maybe that level of optimism is not completely realistic at the moment. But we all hope for success (if we didn’t, we wouldn’t make it in this business), and as insurance professionals, we believe that the destiny of our livelihood and prosperity rests mostly in our own hands. Some luck and various outside forces may intercede at times, but we only have ourselves to blame for failure.
Your financial clients are no different in their feelings about their own businesses. The “buck” stops with them. Yet many large and small business owners fail to grasp the absolute importance of their key employees and how crucial supporting roles can be to the financial accomplishments of a business. Owners may pay well, provide regular bonuses and substantial benefits as rewards for hard work and achievements, but do proprietors properly contemplate the detriment a loss of a key employee may bring to a flourishing business?
Thousands of Americans become disabled every year due to illness or injury, many of whom are key employees or business owners. A key person’s inability to work may have a profound monetary effect on a company. The solution is disability insurance and more specifically, key person disability insurance.
Key person disability benefits allow for funds that may be used to scout, hire and train a replacement employee, or simply provide much needed capital to a business in transition. Benefits are commonly provided in one or two-year monthly payouts after short elimination periods or in lump sums after a 6 to 12 month wait. In this business world of multi-national corporations, wealthy hedge funds, successful law firms and prosperous physician groups, key person monthly benefits can soar into the hundreds of thousands and lump sums can reach over $100 million. The figures can be astronomical, but the benefit programs can be designed to best fit the needs of each business owner, no matter the size of the company and no matter how large or small the benefit.
The extraordinary value of a key person disability policy is that the benefits may be used by the beneficiary in any way the company sees fit. The cash can be used to supplement business revenue or cover the company’s overhead. The inherent nature of the product is to provide capital for a temporary or replacement employee, but there are few stipulations as to benefit use requirements. Key person disability insurance protects the business and sales contributions of which a business owner may not fully recognize the importance. We as business purveyors sometimes miss what is key to our successes. Often that “key” is the person or persons with whom we surround ourselves.xxx
Two weeks ago, my lovely wife gave birth to our first child; a little boy weighing in at just over seven pounds and twenty inches in length. He is perfect (at least from a biased father’s perspective), and he came into the world screaming and healthy. What a miracle it was to behold. I became immediately aware of the great physical and emotional protection he will need on his parents’ part for some time to come. His tender skin, pliable joints, wobbly neck, delicate digestive tract and immature lungs are all going to require substantial care and concern as he ages.
So I have had the pleasure of witnessing how precious life really is, but throughout these first sleepless nights, I quickly came to the realization that although Mother Nature makes us adaptable and withstanding of outside forces, our relatively fragile bodies are susceptible to illness and injury.
The World Health Organization estimates that there are over 30,000 diseases known to modern medicine that affect the human body. Many of those illnesses are relatively benign in nature, but a great number can lead to moderate to severe infliction including temporary and permanent disablement of the body. Common maladies like cardiovascular disease, cancer, respiratory distress, diabetes and kidney disease make up a good chunk of the causes for disability of many working Americans, no matter age or ethnicity.
Aside from illness, the human body is easily corruptible by the ever-present dangers of injury. Our fast-paced lifestyles and frequent travel, driven by global economies and burgeoning technologies, have left ourselves vulnerable to accidents at a similar frequency to generations before us that lacked current levels of safety and operational precautions.
Considering all of these risks, why don’t more of us financially safeguard our livelihoods with disability insurance?
Most Americans suffer from the delusion that they will not be disabled during their lifetime. Unfortunately, the reality is quite different. Over a quarter of working Americans will be affected by a short or long term disablement during their career. Yet, only 31% of those working in the private sector have any form of income protection insurance. Why do we feel impervious to accidents and to the thousands of medical conditions and diseases that can harm the human body to the point of disability? Well, that is just human nature to feel impervious, and it is up to you the advisor to educate and guide your client through the proper planning not only for retirement, but throughout their income accumulation years.
And that is when most of the problems take shape, in the first two-thirds of our lives. We don’t save enough of our earned income. Evolving retirement vehicles have brought promise over the last quarter century, but Americans still don’t save enough for emergencies let alone retirement. One-third of us have no retirement savings, and 48% of us don’t save any annual income. How can we expect to financially survive in these socially and economically precarious times while supporting our families without any savings or income protection? We can’t. We need personal disability insurance. Your clients need personal disability insurance.xxx