| In this issue: |
| Introduction |
| Value of CAT Rider |
| GI in the News |
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| Introduction |
| The focus of this GI News is the sale of the Catastrophic Disability Benefit (CAT) Rider* as part of a guarantee issue disability program. The cost of the additional care associated with a catastrophic disability makes it prudent to review the importance of this coverage with every employer offering a guarantee issue (GI) program. Adding the CAT Rider to a GI offer can be a great way to provide the highest amount of disability insurance coverage when the need is greatest. |
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| Mike Feuerstein |
| Manager, Guarantee Issue |
| * The CAT Rider is not available in California with The ProtectorSM. |
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| Value of CAT Rider |
| You have an appointment to present a case for adding individual disability insurance on a GI basis to a prospect, and you feel confident having put together an offer that covers all the bases. However, many of those proposed insureds would only be fully covered if the employer has added catastrophic disability coverage to the GI plan design. |
| Disability income insurance protects income at time of a claim, but only catastrophic disability insurance coverage, such as the CAT Rider from The Standard, fully addresses the effects a severe disability can inflict on customers' finances. |
| Catastrophic disability usually means the inability to perform any two out of six common activities of daily living (bathing, continence, dressing, eating, toileting, transferring) without hands-on assistance. Severe cognitive impairment, or the total and permanent loss of speech, hearing, sight or the use of both hands, both feet, or one hand and one foot also qualify as a catastrophic disability. The additional cost of ongoing care associated with catastrophic disability can quickly increase beyond the amount for which the insured's normal income would provide. |
| Group long-term disability insurance (LTD) typically covers approximately 60% of salary. The purchase of individual disability insurance on a guarantee issue basis on top of existing LTD can raise the percentage of covered income another 5% to 15%, but typically never more than 75% of total income will be covered by LTD. This gap between pre- and post-disability income can be addressed for catastrophic disabilities with the CAT Rider. The CAT Rider can bridge that gap completely, protecting up to 100% of an insured's pretax income at the time of original policy issue, depending on the maximum issue amount. |
| For example, a qualifying disabled insured earning an annual salary of $78,000, or $6,500 per month, who has LTD coverage, typically will receive 60% of his pretax income in benefits, or $3,900 per month. If the insured in this example also has individual disability insurance coverage on a guarantee issue basis through his employer he will receive an additional $975 in monthly benefits for a total of $4,875. If the insured suffers a catastrophic disability with no CAT Rider in place, the annual shortfall of income would be $19,500 or $1,625 each month! |
| Help protect your customers from the financial risk of a catastrophic disability. Discuss the importance of protecting their total income with the help of guarantee issue coverage including the CAT Rider. Ask for the CAT Rider on every quote with your GI cases. |
| If you have any questions about the CAT Rider, or about a GI sales opportunity, please contact your Regional Director or The Standard at GISALES@standard.com. |
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| GI in the News |
| Plant the seed for Voluntary Sales Success |
| Marketing Voluntary Guaranteed Standard Issue vs. Employer-Paid GSI |
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| Standard Insurance Company |
