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This is a great introduction to one of the most important benefits available.

This is a great introduction to one of the most important benefits available.

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  • Transcript

    • 1. The Need for Individual Disability Income Insurance A presentation for employers and employees about the impact of disability
    • 2. Introduction <ul><li>Standard Insurance Company </li></ul><ul><ul><li>4th largest in Long Term Disability * nationwide </li></ul></ul><ul><ul><li>4th largest in Short Term Disability * nationwide </li></ul></ul><ul><ul><li>8th largest in Disability Insurance * nationwide </li></ul></ul><ul><li>StanCorp Financial Group, Inc. </li></ul><ul><li>Specialty carrier in disability and other lines of insurance </li></ul><ul><li>Founded in 1906 </li></ul><ul><li>*As of 12/31/2004 </li></ul>
    • 3. Financial Strength Ratings for Standard Insurance Company <ul><li>A.M. Best Company A (Excellent) 3rd of 13 rankings </li></ul><ul><li>Fitch AA- (Very Strong) 4th of 21 rankings </li></ul><ul><li>Standard & Poor’s AA- (Very Strong) 4th of 20 rankings </li></ul><ul><li>Moody’s A1 (Good) 5th of 21 rankings </li></ul>All rankings are current as of August 2006.
    • 4.  
    • 5. Your Earnings Potential up to Age 65 <ul><li>Age $ 25,000 $ 50,000 $ 75,000 $ 100,000 </li></ul><ul><li>30 $ 875,000 $ 1,750,000 $ 2,625,000 $ 3,500,000 </li></ul><ul><li>40 $ 625,000 $ 1,250,000 $ 1,875,000 $ 2,500,000 </li></ul><ul><li>50 $ 375,000 $ 750,000 $ 1,125,000 $ 1,500,000 </li></ul>Your Annual Earnings (Assumes annual earnings remain constant to age 65.) Your income is your most valuable asset!
    • 6. If you already have group LTD coverage, additional coverage from The Protector+ can offer significant benefits A typical LTD plan will only replace up to 60% of your take-home salary, potentially reducing it by as much as 45% * After-tax benefits assume 25% tax rate. Just like a regular paycheck, benefits from employer-provided Group LTD plans are generally taxable. 100% 60% 40% 20% 0% 80% Gross Net Salary Group LTD Benefit Gross vs. Net Income (gross less taxes) *
    • 7. When is Two Better Than One? The Protector+ Can Offer Benefits in Addition to LTD 1. This is a hypothetical situation only. Benefits may vary by individual. Amounts illustrated may not be available. The Protector+ is an individual disability insurance policy issued by The Standard (Policy Form B152) 2. Gross less taxes. After-tax benefits assume 25% tax rate. Percentage of Working Paycheck Group LTD Benefits The Protector+ Benefits 1 Working Paycheck 2 2 2
    • 8. Protect your dreams <ul><li>“ Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious medical problem” </li></ul>Sick and Broke by Elizabeth Warren, The Washington Post, February 9, 2005, p. A23
    • 9.  
    • 10. Important information you need to know <ul><li>Disability is more likely than death during your working years </li></ul> 
    • 11. Current disability trends <ul><li>Source: The JHA Disability Book of Facts, 2003/2004 Edition, JHA, Inc. </li></ul>Between 1987 and 1999 deaths from these serious health conditions decreased while disabilities from the same health conditions increased dramatically. + + + + +
    • 12. How long … *Duration of disability is measured from the start of disability to (at most) age 65. can you expect to be away from work as a result of a long-term disability? … not weeks, not months, but years.
    • 13. Current causes of disability <ul><li>Source: Standard Insurance Company </li></ul>Breakdown of diagnoses for The Standard’s disability claims from 1/1/05 to 12/31/05 The conditions listed above do not establish disability. Each claim is evaluated on its own merits and according to the terms of the policy.
    • 14. Three Aspects of Disability <ul><li>What can happen? </li></ul><ul><ul><li>Presumptive Disability – Even if the insured can still perform some or all of his occupation, he is presumed fully disabled and entitled to full benefits under specified conditions which include loss of sight, speech, hearing or use of two limbs </li></ul></ul>Policy Form No. B152. This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state.
    • 15. Three Aspects of Disability <ul><li>What can happen? </li></ul><ul><ul><li>Presumptive Disability – Even if you can still perform some or all of your occupation, you are presumed fully disabled and entitled to full benefits under specified conditions which include loss of sight, speech, hearing or use of two limbs. </li></ul></ul><ul><ul><li>Total Disability – If, due to injury or sickness, the insured is unable to perform the substantial and material duties of his occupation, is not working in another occupation, and is under a physician’s care </li></ul></ul><ul><ul><li>Residual Disability – If, due to injury or sickness, you can perform some of the substantial and material duties of your occupation, or all of these duties but not for as long or as effectively as before, your monthly earnings are reduced by at least 20%; you are under a doctor’s care and you are not totally disabled. </li></ul></ul>Policy Form No, B152. This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state.
    • 16. Three Aspects of Disability <ul><li>What can happen? </li></ul><ul><ul><li>Presumptive Disability – Even if you can still perform some or all of your occupation, you are presumed fully disabled and entitled to full benefits under specified conditions which include loss of sight, speech, hearing or use of two limbs. </li></ul></ul><ul><ul><li>Total D isability – If, due to injury or sickness, you are unable to </li></ul></ul><ul><ul><li>Residual Disability – If, due to injury or sickness, the insured can perform some but not all of the substantial and material duties of his occupation, or all of these duties but not for as long or as effectively as before; his monthly earnings are reduced by at least 20%; he is under a physician’s care and he is not totally disabled </li></ul></ul>Policy Form No. B152. This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state.
    • 17.  
    • 18. Benefits of The Protector+ SM <ul><li>The Protector+ — an individual disability income insurance policy </li></ul><ul><ul><li>Guaranteed Renewable to Age 66/67 </li></ul></ul><ul><ul><li>Benefit for Total Disability </li></ul></ul><ul><ul><li>Benefit for Presumptive Total Disability </li></ul></ul><ul><ul><li>Rehabilitation Benefit </li></ul></ul><ul><ul><li>Waiver of Premium Benefit </li></ul></ul><ul><ul><li>Total Disability Benefit due to Cosmetic or Transplant Surgery </li></ul></ul><ul><ul><li>Survivor Benefit (not available in all states) </li></ul></ul>The policy discussed in this presentation has exclusions and limitations and terms under which the policy may be continued in force or discontinued. For costs and complete details of coverage, contact your Standard Insurance Company representative or The Standard at 800.247.6888. Policy Form No. B152.
    • 19. Policy Definition of Total Disability/Totally Disabled <ul><li>“ Because of Your Injury or Sickness: </li></ul><ul><ul><li>You are unable to perform the substantial and material duties of Your Regular Occupation; and </li></ul></ul><ul><ul><li>You are not engaged in any other gainful occupation; and </li></ul></ul><ul><ul><li>You are under the regular care of a Physician appropriate for Your Injury or Sickness. This Physician’s care requirement will be waived when We receive written proof, satisfactory to Us, that further care would be of no benefit to You.” </li></ul></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Policy Form No. B152. This is not a contract.
    • 20. Optional Riders <ul><li>Available to all occupation classes </li></ul><ul><ul><li>Residual Disability Rider </li></ul></ul><ul><ul><li>Indexed Cost of Living Rider </li></ul></ul><ul><ul><li>Supplemental Social Insurance Rider </li></ul></ul><ul><ul><li>Future Purchase Option Rider </li></ul></ul><ul><ul><li>Noncancelable Rider </li></ul></ul><ul><ul><li>Catastrophic Disability Benefit Rider </li></ul></ul><ul><li>Available to select occupation classes </li></ul><ul><ul><li>Own Occupation Rider </li></ul></ul>Actual contract language and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 21. Residual Disability Rider <ul><li>Residual disability means you are not totally disabled, but because of your injury or sickness: </li></ul><ul><ul><li>Your monthly earnings are reduced by 20% or more of your indexed prior monthly earnings; and </li></ul></ul><ul><ul><li>You are under the regular care of a physician appropriate for your injury or sickness; and </li></ul></ul><ul><ul><li>You are able: </li></ul></ul><ul><ul><ul><li>To do some, but not all, of the substantial and material duties of your regular occupation; or </li></ul></ul></ul><ul><ul><ul><li>To do all of the substantial and material duties of your regular occupation, but not for as long a time or as effectively as you did immediately prior to your injury or sickness. </li></ul></ul></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 22. Indexed Cost of Living Rider <ul><li>This rider helps provide a cushion against inflation during a lengthy disability. </li></ul><ul><li>For each year of disability after the first, the rider pays an amount in addition to the policy benefit based on the average annual change in the Consumer Price Index for All Urban Consumers (CPI-U) subject to a cap of either 3% or 6%, whichever is chosen on the application. </li></ul><ul><li>Payment is subject to the policy’s benefit period and other requirements. The amount payable under the rider will not decrease even if the CPI-U decreases. </li></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 23. Supplemental Social Insurance Rider <ul><li>This rider pays a benefit if the policy’s total disability benefit is payable and no legislated benefits are payable for the disability. </li></ul><ul><li>You must apply for legislated benefits for which you may be eligible and meet other requirements in the rider. </li></ul><ul><li>A reduced benefit is available if legislated benefits are payable that are less than the rider benefit amount. </li></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 24. Future Purchase Option Rider <ul><li>This rider allows for the purchase of benefit increases on each policy anniversary * subject only to financial underwriting and policy requirements. </li></ul><ul><li>Evidence of your good health is not required to purchase an increase. </li></ul>* Increase purchases are allowed only on policy anniversaries falling on or before the rider’s expiration date. This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 25. Noncancelable Rider <ul><li>This rider changes the policy and all riders made part of the policy from guaranteed renewable to noncancelable and guaranteed renewable . </li></ul><ul><li>The Standard cannot change the policy terms or premium until the termination date. </li></ul><ul><li>This rider also changes the policy to provide that, if the maximum benefit period is longer than five years and you become eligible for the benefit for presumptive total disability, total disability payments will be payable for your lifetime as long as the presumptive disability continues. </li></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 26. Own Occupation Rider <ul><li>This rider changes the policy definition of Total Disability * to read: </li></ul><ul><li>“ Because of your Injury or Sickness: </li></ul><ul><ul><li>You are unable to perform the substantial and material duties of Your Regular Occupation; and </li></ul></ul><ul><ul><li>You are under the regular care of a Physician appropriate for your Injury or Sickness. This physician’s care requirement will be waived when We receive written proof, satisfactory to Us, that further care would be of no benefit to You.” </li></ul></ul><ul><li>* This rider removes the following sentence from the definition of Total Disability: </li></ul><ul><ul><li>“ You are not engaged in any other gainful occupation” </li></ul></ul>Not available for all occupation classes This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 27. Mental Disorder/Substance Abuse Limitation <ul><li>A two-year benefit period limitation endorsement for disability caused or contributed to by mental disorder and/or substance abuse is added to each policy that has the Own Occupation Rider. </li></ul><ul><li>This endorsement may also be used at underwriter discretion. </li></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 28. Catastrophic Disability Benefit Rider <ul><li>This rider pays an additional benefit if you are receiving the benefit for total disability and are unable to perform at least two activities of daily living (ADLs), have a severe cognitive impairment, or are presumptively totally disabled. </li></ul><ul><li>ADLs include: bathing, continence, dressing, eating, toileting and transferring (moving into and out of a bed, chair or wheelchair). </li></ul>This is generic language only. Actual contract provisions and availability of certain benefits and riders may vary by state. Riders are available at extra cost. This is not a contract. Policy Form No. B152.
    • 29. Exclusions from Coverage <ul><li>The Standard will not pay benefits for: </li></ul><ul><ul><li>Disability due to war. War means any: </li></ul></ul><ul><ul><ul><li>War, declared or undeclared, whether civil or international; </li></ul></ul></ul><ul><ul><ul><li>Act of war; </li></ul></ul></ul><ul><ul><ul><li>Act incident to war; </li></ul></ul></ul><ul><ul><ul><li>Insurrection; and </li></ul></ul></ul><ul><ul><ul><li>Substantial armed conflict with organized forces of a military nature. </li></ul></ul></ul>This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state. This is not a contract. Policy Form No. B152
    • 30. Exclusions from Coverage (continued) <ul><li>2. The first 90 days of the insured’s disability due to pregnancy or childbirth. </li></ul><ul><li>3. Disability caused or contributed to by your: </li></ul><ul><ul><ul><li>Committing or attempting to commit an assault or felony; or </li></ul></ul></ul><ul><ul><ul><li>Actively participating in a violent disorder or riot. &quot;Actively participating&quot; does not include you being at the scene of a violent disorder or riot while performing your official duties. </li></ul></ul></ul><ul><li>4. Disability while you are confined for any reason to a penal or correctional institution. </li></ul><ul><li>5. Intentionally self-inflicted injury. </li></ul>This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state. This is not a contract. Policy Form No. B152
    • 31. Miscellaneous Policy Provisions <ul><li>The policy is guaranteed renewable until the policy termination date </li></ul><ul><ul><li>The Standard cannot change the policy, except for its premium, until that date. The premium can be changed only after the policy is three years old and if the change applies to all policies with like benefits insuring the same Risk Class. </li></ul></ul><ul><li>Renewal Option </li></ul><ul><ul><li>You may ask that the policy be continued beyond the termination date if you are working at least 30 hours per week and are not disabled at the time of your request. </li></ul></ul>This is a general description only and is not specific policy language. Contract provisions and availability of certain benefits and riders may vary by state. This is not a contract. Policy Form No. B152
    • 32.  
    • 33. <ul><li>While group LTD is a valuable benefit … </li></ul><ul><li>Your coverage is tied to continuing employment with the same employer – you lose coverage if you leave your employer* </li></ul><ul><li>Benefits are generally taxable (to extent employer pays premium) </li></ul><ul><li>Benefits are generally offset by Social Security or other public programs </li></ul><ul><li>Usually covers base salary only. Bonus or incentive compensation are often not included </li></ul>Aspects of Typical Employer-Provided Group LTD Insurance *except for coverage provided by COBRA
    • 34. The Protector+ Highlights <ul><li>Individual disability insurance policy is generally owned and paid for by the employee </li></ul><ul><li>The employee can take the policy with him if he leaves employer </li></ul><ul><li>No Social Security or workers compensation offset 1 </li></ul><ul><li>Can cover bonus compensation as well as base salary 2 </li></ul><ul><li>Benefits are generally tax-free 3 and can be used for current income needs and/or retirement savings </li></ul>1 Assumes a Supplemental Social Insurance Rider is not issued 2 Subject to our underwriting practices and limits 3 Benefits are generally tax-free if premium is paid by employee and not reimbursed by employer. See your tax advisor for advice specific to your situation For specific costs and further details of coverage, including exclusions, any reductions or limitations and the terms under which the policy may be continued in force, see your agent or write to Standard Insurance Company at 1100 SW Sixth Avenue, Portland, OR 97204. Policy Form B152
    • 35. <ul><li>Group and Individual Coverage </li></ul><ul><ul><li>Gives the best of both worlds </li></ul></ul><ul><ul><li>Provides the opportunity for employees to maximize their total disability benefits </li></ul></ul>A Combination
    • 36. <ul><li>The goose that laid the golden egg ~ </li></ul><ul><li>Which would you insure? </li></ul><ul><li>… the goose? </li></ul><ul><li>… or the egg? </li></ul><ul><li>You insure your home, your car, your valuable assets … </li></ul><ul><li>Do you insure your income? </li></ul>
    • 37.  

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