Individual Disability Insurance (DI) Video Talk Show
Hosted by Steve Savant, national insurance columnist and financial color commentator.
Special Guest: Marcy Pruitt, head of Brokers Alliance DI Division and nationally recognized DI expert, educator and workshop trainer.
Breaking down the premium cost of DI as it relates to the value of the benefit. The rule of thumb is insuring 60% of my net after tax income for about 2 1/2 %. DI can cover personal income, business overhead, buy/ sell agreements, retirement protection for qualified plans, key person and loan indemnification.
Paycheck protection is possible by purchasing DI. Design a DI policy to insure ongoing income. Customizing a DI policy the needs of the insured: 30 day to 2 year elimination periods and benefit periods from 2 years to age 67, sometimes for a lifetime. There are two basic DI formats for policy contracts: Non-cancelable policies and guaranteed renewable.
DI benefits may be taxable or tax free depending upon ownership and the premium payor. Psychological impairments and addictions: mental, nervous or CPT coded areas as well as drug or alcohol abuse limited coverage for two years, but recently expanding longer periods.
Medical Underwriting Diabetes, Sleep Apnea, Cancer, Cardio, Mental Conditions, Drug or Alcohol are knock out conditions for traditional DI carriers, but surplus DI carriers like Fidelity using a graded benefit with a five year coverage period. Financial underwriting will require tax returns and employment verification.
Addition riders to consider is a purchase rider that can add benefits later without medical evidence or a catastrophic rider that require 2 of the 6 Activities of daily Living to initiate the benefits which can increase to 100% of earned income. Most DI policies cant be offset by other disability income benefits like social security. DI benefits may be taxable or tax free depending upon ownership and the premium payor.
Psychological impairments and addictions: mental, nervous or CPT coded areas as well as drug or alcohol abuse limited coverage for two years, but recently expanding longer periods. Lloyds of London are used for extreme coverage: professional athletics, entertainers, etc.