A Focus on Fundamentals: Excess DI
Personal disability insurance is one of the elementary financial needs of any professional, and in a perfect world should be as commonly prescribed as auto or homeowners insurance. That ideal is far from the reality. There are currently fewer than 30 carriers offering disability insurance in the United States, but more than 800 selling life insurance. More working Americans annually purchase life policies than DI policies, but the average person is over three times more likely to become permanently disabled than die during his/her career. According to the Council for Disability Awareness, one in eight active income earners will suffer a long term disability before he/she reaches traditional retirement age. These statistics are clear and concise and should be a sounding alarm to all life and health insurance agents.
Every one of your clients needs at least 65% (the industry-recommended standard) of their annual incomes covered by comprehensive, “own occupation” disability insurance. Now that task of DI acquirement may be one that you regularly undertake as a dutiful insurance advisor, but you probably come across roadblocks as you search for suitable and sufficient disability coverage for certain clientele. For example, finding your high net worth clients some disability insurance is not a problem, but finding them enough disability insurance is one of those roadblocks.
Even if a high net worth prospect has employer sponsored group long term disability coverage (LTD) and a separate personal policy, he/she may often times be improperly insured at unacceptably low levels. It’s crucial to think of and advise on disability risk assessment in layers or tiers. Group LTD usually provides the basic coverage or first tier of insurance. For a healthy client under the age of 60, the second tier of protection can be comprised of an individual non-cancellable or guaranteed renewable product readily available through the “traditional” disability market. Most insured persons can find sufficient levels of protection through the first and second tiers. But then there are those who live outside the norm, who annually earn in excess of $300,000. These are your higher net worth clients who need more insurance than is customarily available through American insurance companies.
The solution is simple and extremely accessible. Petersen International specializes in providing a third and sometimes fourth tier of supplemental disability income insurance. These additional layers of coverage are absolutely integral to proper financial planning for your wealthier clientele. The Petersen supplemental DI products offer a number of flexible “own occupation” benefit options which are necessary in accomplishing your clients’ long term income protection goals and satisfying the traditionally demanding and unique needs of high net worth individuals.
Call or email us for more information about the tiered approach to disability income protection as request an outline of our high limit supplemental DI benefits.