Disability Insurance 2^nd Edition

Table of Contents

Chapter 1 – The Basic Facts of Disability Insurance	1
Who needs Disability Coverage?	1
Questions to Ask	1
Income Replacement	7
Why not replace 100 percent of the Family’s Income?	8
Income is a Person’s Most Valuable Asset	9
Worker’s Compensation	9
Degrees of disability	10
Monthly Expenses Worksheet	12
Income for Expenses Worksheet	13
How soon should benefits begin?	13
How long should benefits last?	14
Disability Income Benefit Management	15
Chapter 2 - Types of Coverage	16
Locating Disability Income Insurance Benefits	16
Short-Term versus Long-Term Disability Policies	16
Defining “Disability” in the Policy	17
Employer Provided Disability Coverage	18
Association Disability Insurance	19
Types of Eligible Groups	20
State Disability Income Programs	20
Unions	21
Creditor-Debit Group	21
A Common Denominator	21
Few People Buy Disability Income Protection	21
Individual Coverage	22
ARDI	22
Chapter 3 – Policy Provisions	23
Sample Policy for Disability Income	23
Pregnancy	26
Pre-existing Condition Limitation	26
Legal Action	28
Premiums & Reinstatement of Policies	28
Grace Periods	28
Refunds Following Death	28
Policy Termination Dates	28
Reinstatement of Policies	29
Military Service	29
Contracts	29
Mandatory Provisions	30
Description of the 13	30
Description of Optional Provisions	33
Waiver-of-Premium Provision	35
Non-occupational Provision	35
Transplant Provision	35
Rehabilitation Provision	35
Non-disabling Injury Provision	35
Preexisting Conditions Provision	35
Common Riders	36
Return of Premium Rider	36
COLA Rider	36
Social Security Rider	36
Purchase Option Rider	37
Residual Disability Income Rider	37
Family Income Rider	37
Accidental Death & Dismemberment Rider	37
Chapter 4 - Occupational Classifications	39
Class 4A, Class 3A, Class 2A, Class A	39
Class B	40
Special Circumstances	40
Underwriting Protects the Insurer	40
The Agent’s Role in Underwriting	41
The Underwriting Process	42
The sources used in the underwriting process	43
Moral & Morale Hazards	44
The Decision	45
Why the Need?	45
Reinsurance	46
Chapter 5 - Social Security Disability Benefits	48
Social Insurance	49
SSDI & SSI	51
Qualifying for SSDI	51
Qualifying for SSI	52
After Application of SS Benefits	53
Eligibility for Worker’s Compensation or State Disability Payments	53
How does SSA Evaluate a Claim for Benefits?	54
The Definition of “Substantial Gainful Activity” (SGA)	54
Residual Functional Capacity (RFC)	55
Listings of Impairments, Part A	55
Listings of Impairments, Part B	59
Supplement Security Income (SSI)	62
Who is eligible for SSI?	62
Ineligibility for Social Security Insurance Income	62
Social Security Benefits Could Affect Disability Income Benefits	63
Worker’s Compensation Can Affect Disability Insurance Income	63
Social Security Disability Insurance & Worker’s Compensation Together	64
Chapter 6 – Financial Rating Systems	65
Understanding the Lingo	65
A.M. Best Company Rating System	66
A.M. Best Ratings	67
A.M. Best’s Rating Modifiers	68
S&P Global’s Rating System	69
Rating Symbols for S&P	69
Moody's Rating System	70
Rating Symbols	70
Fitch Ratings	71
Fitch Rating Actions	73
International Long-Term IFS Rating Scale	75
National Long-Term IFS Rating Scale	77
What does the (xxx) indicate?	78
International Short-Term IFS Rating Scale	78
Weiss Research, Inc. Rating System	79
Additional Notations	81
State Ratings	81
Chapter 7 – Ethics	83
Simultaneous Representation	84
Replace Their Own Business	85
Steps to Minimize Possible Misunderstandings	86
Admitted Assets	87
Consolidated Assets	88
Investment Grade Issues	88
Surplus Reinsurance	89
What Ethical Agents Know	92
Insurance Perceptions	92
Establishing Ethical Goals	94
Example	96
Why Be Ethical?	97
Following the Law	97
Ethics in the Workplace	98
The Same by Any Name	98
Putting the Past into the Future	100
Mary Mahowald	101
Companies Set Guidelines	104
Promoting Ethical Behavior	106
Four Basic Questions	106
Egoism	109
Is it possible to Teach Ethical Behavior to Others?	110
What is the Scope of Ethics?	110
What does it take to be a Moral Person?	111
The Quality of Work	112
Life’s Legacy	112
The Leaders of the Pack	113
Example #1	113
Example #2	114
Responsibilities to Other Moral People	114
Objectivist Ethics	116
Holding our Ethical Code	117
Example	118
Survey of CEO’s	119
Sympathy & Empathy	122
Looking the Part	123
Courtesy	123
Mores	124
Education/Continuing Education	128
Getting Education in a Timely Manner	129
Example	130
Laying Out Policy Benefits & Limitations	131
Policy Replacement	131
Why would an agent replace their own business?	132
When the Agent Allows Misconceptions	133
Keeping in Touch after the Sale	134
Commingling Insurance & Personal Funds	134
The Professional	135
Due Diligence	135
Technical Approach Versus Common-Sense Approach	136
Selecting Insurers to Represent	142
If it’s Legal…	142
Moral Dilemma	143
Ignorance is no excuse!	145

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA 98328

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