April 13, 2011.
The Northwestern Mutual Life Insurance Company (Northwestern Mutual), Milwaukee, WI
Disability Income Insurance
Medical Occupation
Definition
Robert P. Quinn, CLU, CLTC Disability Insurance Specialist Sergio Arana
Financial Representative
*Patent Pending. Northwestern Mutual owns a pending patent application that is based in
part on the Medical Occupation Definition described herein.
How much disability income insurance
do you need?
Your gross earning power is worth more than you think.
35 $4.5 million $6.0 million $7.5 million $10.5 million
45 $3.0 million $4.0 million $5.0 million $7.0 million
55 $1.5 million $2.0 million $2.5 million $3.5 million
Age
Today $150,000 $200,000 $250,000 $350,000
Not counting inflation or income increases, your current income through age 65 would be:
Tips for Designing
Comprehensive Disability Income Protection:
Design a program that will best meet your total needs.
1. Understand how individual disability income insurance works.
a) Understand your definition of total disability options; but
b) Consider the entire policy
2. Select appropriate disability insurance policies for all the risks you face.
Tips for Selecting
Individual Disability Income Insurance:
Select a policy that will best meet your needs over the long term.
1. Understand how disability income insurance works 2. Consider the entire policy, not just one portion
Understand how disability income
insurance works
Why is this a misconception?
Common Recommendation:
You need “own occupation” or “specialty own occupation” disability income insurance.
Common Misconception:
With this type of insurance, you will be considered totally
disabled and receive your full disability benefit if you can no longer do your main or principal duty.
Understand how disability income
insurance works – the Realities
But now there’s another option….
B. The differences between various “own occupation”
policies only come up when/if you first meet the above criteria to be totally disabled
C. All current “own occupation” policies are essentially the same when it comes to partial disability (still capable of doing one or more principal duty):
You must work in order to receive a proportionate (partial) benefit
A. To be totally disabled, you must be unable to do your “principal duties” – and “duties” is always plural
Northwestern Mutual’s
Medical Occupation Definition
Would this coverage more closely meet your needs & expectations?
• Unique in the industry, designed specifically with input from physicians and dentists.
• Provides flexibility that may not be available with “typical”
own occupation policies.
Before disability, her principal duties were…
As a result of disability, she is…
Under the Medical Occupation Definition, she has flexibility to: Procedures
(70% of time & income)
Non-procedural patient exams
(30% of time & income)
Unable to perform procedures Able to perform
non-procedural patients exams, etc.
Not available in all states.
A. Continue working and be considered partially disabled. OR
B. Give up gainful employment and be considered totally disabled.
Tip: Consider the entire policy
Other policy features may be very important for your needs.
Disability policies are more than just the
“definition of total disability”
•
How is partial disability defined?
•
Is there a transition or “return to work” benefit?
Our proportionate benefit may give a distinct advantage: • Do not need to demonstrate income loss for first 6
months
• Since income loss often lags behind duties or time loss, could receive a benefit from us sooner
Northwestern Mutual’s
Proportionate Benefit for Partial Disability
Tip: Select disability insurance policies
for all the risks you face
Small business owners need more than individual DI coverage...
• Overhead expense coverage • Buy-out coverage
What happens to your business if something happens to you?
You
What’s Most Important to Your
Business?
If you were to become sick or hurt and
unable to work….
How would your business be impacted?
Would you be able to:
• Continue to pay employee salaries?
• Satisfy ongoing expenses relating to your business or practice?
• Hire someone to run your business or practice? What if a partner or key employee were disabled? In any of these cases….
The Advantages of
Disability Overhead Expense (DOE) Insurance
Gives you time to make decisions on the future of your business
1. Provides benefits to pay
ongoing overhead expenses 2. Pays benefits for total or
partial disability
3. Provides benefits to pay for a replacement
4. Premiums are tax-deductible 5. Benefits received can be
offset against expenses to reduce tax liability
The Advantages of
Disability Buyout Insurance
Can help trigger and fund a buy-sell agreement
1. Funds a disability buy-out
agreement with lump-sum or installment payments
2. Reimburses the buyers of the business with tax-free benefits
3. Instrumental in determining when an owner is totally
The Advantages of
Disability Keyperson Insurance
Benefits can be used in many ways to support the business
1. Provides a benefit to the
business in the event the key person is disabled
2. Benefits can be used to a) Strengthen cash flow
b) Hire or train a replacement c) Provide wage continuation
benefits for the disabled key employee
3. The insured can be changed if your key employee leaves
Tip: Consider the company behind the
contract
Strength, experience, and mutuality matter.
•
Financial strength and ratings
•
History & experience in the disability
insurance marketplace
The Power of Partnership
Learning to Invest With Confidence
Disability Insurance
Protecting Your
Most Important Asset
Learning to Invest with Confidence
Disclosure
Insurance Agent of Northwestern Mutual (life insurance, annuities and disability income insurance).