Disability Insurance

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% 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

    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

    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 12

30

  Description of Optional Provisions

33

    Waiver-of-Premium Provision

34

    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 4AS, Class 4A, Class 3A

39

    Class 2A, Class 2B

40

  Special Circumstances

40

  Underwriting Protects the Insurer

41

  The Agent’s Role in Underwriting

42

    The Underwriting Process

42

    The sources used in the underwriting process

43

  Moral & Morale Hazards

44

  The Decision

45

  Why the Need?

46

    Reinsurance

46

Chapter 5 - Social Security Disability Benefits

48

  Social Insurance

49

  SSDI & SSI

52

  Qualifying for SSDI

52

  Qualifying for SSI

52

  After Application of SS Benefits

53

  Eligibility for Worker’s Compensation or State Disability Payments

54

  How does SSA Evaluate a Claim for Benefits?

54

  The Definition of “Substantial Gainful Activity”

54

  Residual Functional Capacity

55

  Listings of Impairments, Part A

56

  Listings of Impairments, Part B

59

  Supplement Security Income (SSI)

62

  Who is eligible for SSI?

62

  Ineligibility for Social Security Insurance Income

63

    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

  Standard & Poor's Corporation

69

    Rating Symbols for Standard & Poor

69

  Moody's Rating System

70

    Rating Symbols

70

  Fitch Ratings

72

  Fitch Rating Actions

74

  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

79

  Weiss Research, Inc. Rating System

80

    Additional Notations

81

    State Ratings

81

Chapter 7 – Ethics

83

    Simultaneous Representation

84

    Replace Their Own Business

86

    Steps to Minimize Possible Misunderstandings

86

    Admitted Assets

87

    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

115

  Objectivist Ethics

116

  Holding our Ethical Code

117

    Example

118

    Survey of CEO’s

120

    Sympathy & Empathy

123

  Looking the Part

124

  Courtesy

124

  Mores

125

  Education

128

  Getting Education in a Timely Manner

129

    Example

130

  Laying Out Policy Benefits & Limitations

131

    Policy Replacement

132

    Why would an agent replace their own business?

133

  When the Agent Allows Misconceptions

133

  Keeping in Touch after the Sale

134

  Commingling Insurance & Personal Funds

135

  The Professional

136

  Due Diligence

136

    Technical Approach Verses Common-Sense Approach

137

  Selecting Insurers to Represent

143

  If it’s Legal…

143

    Moral Dilemma

144

    Ignorance is no excuse!

146

  

 

United Insurance Educators, Inc.

8213 – 352nd Street East

Eatonville, WA  98328

(253) 846-1155