DI to the MAX!
Don’t Leave Your Clients
Exposed!
by
Thomas Petersen, MBA, RHU
Petersen International Underwriters
Please contact your local Plus Group office for more information. Go
to www.plusgroupus.com and click on the agency locator map to find
an office near you or call 800/831-1018.
1
What is Disability Insurance For?
• Cash Flow?
• Replacement
percentages are to Stay
Alive, not to Thrive!
Asset Conservation!
2
To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
3
To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
4
Show Me the Max!
5
How Much Disability Coverage
is Enough?
6
How Much?
• Various 3rd party surveys – 65% to 75%
• Various Industry experts – 50% to 80%
– LUTC
– RHU
– LOMA
– The American College
• Traditional Group Disability – 60% or 2/3
7
% Income Issued by Most Carriers
If 65% is the agreed upon number, why does the primary markets limit the coverage?
100
75
70
60
50
40
30
20
0
The Need Line
75,000
150,000
300,000
500,000
1,000,000
8
Excess
Not limited
to justDisability
Personal Disability!
–
Buy-Sell
–
Business Overhead Expense
–
Key Person
What are the maximums from most carriers??
9
The Buy Sell
• Wholesaler Company
– Valued at $7,000,000
– 2 Partners
• I need $7 million Life
and $1,000,000 DI Buy
Sell!
• The Solution
– Excess Buy-Sell Disability
10
The $100,000 BOE
• 1 Doctor – Plastic
Surgeon
• Clinic, staff, airplane
• Monthly overhead
$100,000
• Solution - $100,000 BOE
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$250,000 Annually
• $250,000 Annually
– $20,833/month
– Traditional = $8,800 (43%)
– Need = $13,540!
– Excess for $4,740
Just to Stay Alive!
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To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
13
I Have a Guy Who…..
• Actor
14
I Have a Guy Who…..
• Actor
• Pilot
15
I Have a Guy Who…..
• Actor
• Pilot
• Martial Arts Instructor
16
I Have a Guy Who…..
•
•
•
•
Actor
Pilot
Martial Arts Instructor
Oil Rig Fire Fighter
17
I Have a Guy Who…..
•
•
•
•
•
Actor
Pilot
Martial Arts Instructor
Oil Rig Fire Fighter
Athlete
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I Have a Guy Who…..
•
•
•
•
•
•
Actor
Pilot
Martial Arts Instructor
Oil Rig Fire Fighter
Athlete
Yacht Crew
19
I Have a Guy Who…..
•
•
•
•
•
•
•
Actor
Pilot
Martial Arts Instructor
Oil Rig Fire Fighter
Athlete
Yacht Crew
Teaching Pro
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To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
21
A Great Case except….
22
To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
23
Who CARES About the
Occupation?
24
To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
25
We Build Assets
Why Sacrifice Them?
• High Net Worth?
• High Unearned Income?
26
To The Max
• Not Enough Coverage
• High Net Worth
• Difficult Occupation
• High Unearned Income
• Difficult Avocation
• Special Situations
• Health Issues
• Special Products
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The $30 Million Man
• The problem
– 10 lawyer firm
– Annual revenue
exceeded $30 Million
– The Rainmaker!
• The Solution
– Key Person DI
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The College Senior
• Age 21
• Philosophy Student
• 100mph fastball!
29
Meet Smith and Jones
• Scenario
– Dr. Smith (30) wants to buy
in to Dr. Jones (60)
practice.
– Goal – 5 year payments
– Problem – What if Dr.
Smith doesn’t make it?
– What if Dr. Jones Doesn’t
make it either?
• The Solution – DI Buy-In
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And FULL Benefits!
• The problem
– Company providing a
severance package to
include salary and
benefits!
• The Solution
– Severance Disability Plan
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The Golden Spike
• The Problem
– 3 Partners in business 20
years
– Have DI Buy-Sell
– 1 Partner is now 60
• The Solution
– The Golden Spike DI Buy
Sell to fill in the gaps
32
DI to the MAX!
Don’t Leave Your Clients
Exposed!
by
Thomas Petersen, MBA, RHU
Petersen International Underwriters
Please contact your local Plus Group office for more information. Go
to www.plusgroupus.com and click on the agency locator map to find
an office near you or call 800/831-1018.
33