"D. Stephen Heersink" <dsh[at]intergate.com> wrote in message
news:400b0759.170622151[at]news.intergate.com...
- quote -

Nobody has a AAA+ rating. No rating agency issues that rating. Top ratings
for health insurance companies (and DI is a health insurance policy), are
often less than the top rating, because of the higher, less predictable risk
of morbidity claims. A top rated carrier invariable specializes in more
predictable business, like life insurance. What is more important is the
stability of the rating, rather than having the top rating. Several large,
top rated carriers went belly up (i.e., Executive Life, Mutual Benefit
Life).

For example, the largest issuer of individual DI coverage is UnumProvident.
Their AM Best rating is A- (A minus).
Illinois Mutual, one of the largest blue/gray collar DI carriers has the
same A- rating with AM Best.
Guardian has an A+ rating, which is the second best from AM Best, and they
are a major own-occ, non-can DI carrier.

- quote -

Only 5 states and Puerto Rico offer disability coverage. That means 45
states, DC, and the rest of the protectorates offer zilch.

- quote -

Unfortunately, most occupations can't purchase benefit periods that long. In
general, many blue/gray collar occupations are limited to 2 or 5 year
benefit periods. Some policies with To Age 65 benefits may only have "own
occupation" coverage for 2 or 5 years, which means if you can flip a light
switch, or answer the phone, you're not disabled.

- quote -

Once you're sick or hurt and cannot work, you can't change AT ALL.

- quote -

Most people spend, or save, ALL of their after-tax income (many spend even
more). Full coverage is the best recommendation, because expenses generally
increase during periods of disability. Full coverage for most people is
65-70% of earned income.

- quote -

First sentence, good. Second sentence, irrelevant. What an agent puts in
writing is TOTALLY IRRELEVANT. An agent is specifically prohibited by law
from altering declaration pages, or policy specification pages, and they
can't alter the boiler plate, either. NOTHING they put in writing is worth
anything. The ONLY thing that matters is the policy itself. Answers are to
be found there.

- quote -

Financial underwriting is generally performed BEFORE issue, so that when one
meets the definition of disability, the company pays the stated benefits.
Exceptions are benefits integrated with Social Insurance, such as Social
Security, State disability programs, and workers compensation. One can
purchase an "all base" policy that is NOT integrated, and ALWAYS pays the
stated monthly benefit upon proof of claim.

- quote -

Underwriting is TOUGH. If you've been sick, or hurt, even if you've never
missed a day of work, the odds of that pre-existing condition being covered
are next to zero for standard issue coverage. I just had a client declined
today, which brings up a VERY IMPORTANT ISSUE: The TRUTH.

If an applicant makes an ommission, material or not, on an application, not
only are they likely to be declined, the agent can't do anything to help get
the policy issued. Case in point: A client had a recent diagnosis that she
did not disclose on the application, so when I get a phone call from the
insurance company saying she was declined, the company cannot tell me why. I
always tell my clients that the MUST tell me the truth, otherwise, I can't
help them. Fortunately, this doesn't happen often, but it did today. Now her
MIB record is going to indicate an application, and when she applies with
any other carrier, they are going to ask if she was declined, and she MUST
answer yes, which is a PERMANENT RED FLAG that will follow her the rest of
her life.

If she had disclosed this condition on the application, there are steps an
agent can take to help get the case issued. But, once you lie, you've
screwed yourself.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Wed, 14 Jan 2004 16:36:35 CST, ksu93dlv[at]aol.comAntiSpam
(NoNameAtAll) writes the message:

- quote -

I cannot underscore enough the importance of additional disability
insurance in the event that you or your working spouse, or both,
should become disabled. I bought a policy with minimal premiums in my
20s and have used it throughout my 40s. Without that extra disability
payment each month, I could not have survived financially -- and
that's with my receiving the maximum SSDI (Social Security Disability
Insurance) allowed. I am not now nor have I ever been an insurance
salesperson, but this is one product that deserves everyone's serious
consideration.

In buying a policy I recommend the following very strongly:

1. Use only a AAA+ rated Insurance Company
2. Get to know its representative well.
3. Buy a policy that comports with your reasonable need for it.
For example, if you have six month's income stashed away
you only need a policy that begins at six months of disability
I find a policy that begins after 90 days of disability the
best for most people.
4. Remember that most State disability programs end after 6
months and there is a significant time lag between State
disability and SSDI kicking in.
5. Make sure the policy will continue to make payments for your
full term of disability -- or at least until you turn 65.
6. Make sure you are comfortable with the all the above.
Once disability begins, you cannot "change" disability
carriers with any reasonable expectation.
7. The amount of the policy should be at least 50% of your
current earning ability, and should adjust as your income
changes
8 A nice component is the ability to buy additional insurance
as one ages and one's income requirements change. A
$950/mo. now may seem adequate, but not if serious
inflation occurs.
10 READ THE POLICY CAREFULLY. GET QUESTIONS
ANSWERED IN WRITING.
11 Know that some insurance companies do not auto-
matically pay the full amount of the policy, but only if
you are earning a sufficient amount upon disability
to collect their "internal" tables. Ask about these
internal tables. You may think you have a $950/mo
policy to find out that the full amount is payable only
if you have 'x' amount of income at the time of disability
12 Recognize that disability underwriters do so to their favor
Question anything not abundantly clear IN WRITING

Hope these suggestions help.

Kind regards,
___________________
D. Stephen Heersink
San Francisco
dshsfca[at]intergate.com

An EXTREMELY well written responce.............
SEE BELOW


Brent D. Gardner, ChFC wrote:
- quote -


Both of the above mentioned policies ARE absolutely
GUARANTEED renewable. The difference being that
with the second one G/R, the company DOES reserve
the right to Increase the premium if they see fit. However
as mentioned above, the companies with the most experience
in this field RARELY do. If they feel that they might NOT be
making the profits that they need, they will usually raise
the premiums of NEW contracts..........

- quote -


THIS is the key. Select a qualified agent, one who has
been selling DI for some period of time, for MORE
than one company. He/she should be more familiar
with the best benefits from the best companies......


- quote -


This is one of the MOST overlooked products that we
offer for sale, and provides probably the MOST benefit
for the buck:

Generaly speaking the premium IS Income Tax Deductible,
and the benefits are NOT Income taxed to you. Notice
(before I get jumped on) that I did NOT say that the benefits
are NOT income taxable.................. simply that you do NOT
pay any income tax................

The benefit that YOU receive is an amount that you were
able to purchase,up to the amount that you need to maintain
the operation of the business ie:
rent
phone
electric
salaries
etc.
The actual benefit WILL be Income Taxable, but will be
offset by the expenses = no tax cost to you.......

therefore, premium tax deductible, NO Tax being paid........

Cal Lester CLU




======================================= MODERATOR'S COMMENT:
Please consider trimming the post to which you are responding. -HWW

ksu93dlv[at]aol.comAntiSpam (NoNameAtAll) wrote in message news:<20040114170818.13058.00000028[at]mb-m10.aol.com> ...
- quote -

Michelle Singletary wrote a good piece in the Washington Post about
when disability insurance is and is not taxable income. You can find
the article at:

http://www.washingtonpost.com/ac2/wp...&notFound=true

[Watch for URL wrapping.]

Actually, most of her articles are pretty good, I read them regularly.
You can check out her column at:

http://www.washingtonpost.com/ac2/wp...&notFound=true

[Watch for URL wrapping.]

No, I don't work for the Washington Post.

--
Mike Loll / michaelloll[at]hotmial.com

"NoNameAtAll" <ksu93dlv[at]aol.comAntiSpam> wrote in message
news:20040114170818.13058.00000028[at]mb-m10.aol.com...
- quote -

One would hope that financial advisors knew a thing or two about Disability
Income insurance, or DI as we call it. Unfortunately, not many do. Why?
Demand is modest (but growing). Outside of high income, white collar
professions, market penetration is around 15%, which is horrible,
considering how big this risk is.

Another factor contributing to ignorance is the number of companies
manufacturing the product has diminshed greatly. There are only about a
dozen major DI carriers left, and without looking them up, I can probably
name most of them:

Guardian (owns Berkshire)
UnumProvident (merged Unum with Provident, which had already merged with
Paul Revere)
MassMutual
Northwestern Mutual
Principal Life
Boston Mutual
Illinois Mutual
Union Central
Ohio National
MetLife
Pan American Life
Assurity Life

There may be a few others that offer individual products, but not many.
There are many others that offer group DI products.

One reason many agents don't spend too much time talking about DI is
underwriting -- because it is TOUGH. Companies issued policies with liberal
definitions in the 80s and got burned bad. Today, I tell my clients in no
uncertain terms -- "If you've been sick or hurt already, the odds of that
pre-existing condition being covered under a new policy is next to zero. You
need to get this stuff BEFORE you get sick or hurt."

There are some that offer special policies for impaired risks, like Illinois
Mutual and Boston Mutual, but that's a last resort, and it is still far from
being guaranteed issue.

As an attorney, you have more choices than most, with a wide variety of
policy designs. Many agents recommend Non-Cancellable DI for attorneys
(premiums are guaranteed), but some companies that offer Guaranteed
Renewable (premiums can increase) contracts that have never had a premium
increase. If the decision comes down to chosing between Non-Cancellable with
a limited benefit period (i.e., 2, 5 or 10 years) versus Guaranteed
Renewable with a benefit period To Age 65 (or 67), I'll favor the longer
benefit period.

I've sold policies with all of the carriers I listed above, except the
captive Northwestern Mutual. I'll summarize where the top few fall, in my
opinion:

Guardian -- Cadillac contract with Cadillac premium. You get what you pay
for. This is the best DI policy one can buy, period. Its also what I own on
myself.
MassMutual -- Carve out a couple of benefits that Guardian offers, and pay a
lower premium. Great contracts, all around.
Union Central -- Newer design with a choice of definitions of disability,
which gives a wider premium range for a given schedule of coverages.
Illinois Mutual -- Definitions are more conservative than the others, but
solid company and contract. Some choose this over the others because of the
Surrender Value Rider, that refunds 100% of premiums, less any claims paid,
at age 65. It also has a Activities of Daily Living rider which allows for
up to 100% replacement of income, which is unique, and valuable in cases
where one is REALLY disabled bad.

Other than Northwestern Mutual, just about ANY insurance agent can broker a
DI policy with the other companies I mentioned, and the BEST thing you can
do is SELECT a good agent, who understands the differences between policies
and can help you pick the right one for you.

To apply, you're going to need two years worth of 1040s, and perhaps some
other tax schedules (and if you're self-employed, you may want to also
consider Business Overhead Expense coverage, which is DI that pays to keep
the office open). Underwriting is TOUGH, and also UNFORGIVING, if you fudge,
omit, or outright lie.

Case in point: A client who is a high income white collar executive (salary
and bonus over $225,000 per year). He has no DI through his employer, so I
recommended an individual policy. He applies, and an exam is required. He
was asked specifically if he used drugs, including marijuana. He didn't
disclose, but THC was detected in his urine. That's a material omission
(read: lie) that will now follow him for the rest of his life, through the
Medical Information Bureau (MIB).

The insurance application was DECLINED. If he had disclosed his recreational
use of marijuana, he would have been issued a standard policy just like
someone that smokes cigarettes.

If you have pre-existing conditions, the odds are those conditions will NOT
be covered, although companies may remove a ridered or excluded condition
after a period of time with no recurrence.

If you have enough liquid savings to last for six months without income, I
would recommend a policy with a 180 day elimination period, with benefits to
age 65, with a monthly benefit that meets your needs (generally 50-70% of
earned income). If you don't have enough savings, a second policy with a 30
day elimination period, and a short benefit period (say, six or 12 months),
would be an appropriate addition until you have an emergency fund, at which
time you can drop the second policy.

Optional riders worth considering would include:

1. Guaranteed option to increase coverage, so that you can buy more
coverage, even if your health changes for the worse.
2. Cost of Living Adjustments (COLA) -- protects the purchasing power of
benefits over a long disability.
3. SIS or Social Insurance Substitute -- some policies allow you to
integrate with Social Security, workers compensation, and state DI plans.
Others issue "all base" coverage that is NOT integrated. I prefer the
latter, but it costs more. Odds are against one collecting from Social
Security, but if one can qualify, they are going to need every penny they ca
n get.
4. Partial disability -- If you return to work, but can't work full time,
you'll need some income, which is where this rider comes in.

What I'm listing is generic, because every company has slightly different
variations on these themes, and the definitions in the contract are going to
be different with every company.

Questions? Comments?

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

I figure many folks knowledgeable about investing may also know a thing or two
about disability insurance, so hopefully you can help me out. I'm a 32-year-old
attorney. My wife does not work, we have one young child and a second one on
the way. Clearly I need disability insurance. What kind of plan should I look
for and where should I get it?