agribank and first resource group presents di solutions for america’s farmers
TRANSCRIPT
AgriBank and First Resource Grouppresents
DI Solutions forAmerica’s Farmers
FCS roots are in Middle America •
• Illinois Mutual’s roots are also in Middle America.
• Farmers were among our first customers over
95 years ago and continue to remain a strong
market for Illinois Mutual.
• Our strong 95 year history demonstrates our
financial strength and stability that farmers can
trust and count on.
Founded in 1910
Has sold guaranteed renewable DI since 1955
Holds A- Excellent rating from AM Best
We are a leader in the GR and BE Market
Reached $1 billion in assets in 2003
Illinois Mutual
Farmers Need Disability Insurance
• Farmers Harness the power of nature to make things grow.• This is a way of life that had long been the dominant occupation of human beings since the dawn of
civilization.• There are approximately 3.1 million men and women who work on American’s 2.3 million farms and
ranches.• According to Accident Facts published by the National Safety Council, farm accidents and other
work-related health problems cause 120,000 injuries a year. The majority of agricultural work injuries (61%) occurred to the operator of the farm or a farm family member.
Door Opening Questions:• How long could you make it without a paycheck, milk check or crop check?
• Do you find it hard to live within your income? How would it be living without that income?
• You can say, “I don’t need it,” but can you say, “My family won’t need it”?
• If you save 10% of your income each year, one year of disability could wipe out 10 years of savings.
• If you become hurt or sick and are unable to work, there are five sources of income for your family: relatives, friends, charity, liquidation of assets and insurance. Which would you prefer?
Foundation to a Financial Plan
Auto/Home Life / Health Property Insurance Insurance Insurance
Retirement Plans Savings Investments
Business Interests
Disability Income Insurance
Pass on Personal and Bus. Assets
Chances of Disability
54%50%
45%40%
33%
0%
20%
40%
60%
Age 30 Age 35 Age 40 Age 45 Age 50
“Chances of suffering a disability lasting 90 days or longer before age 65.”
FCS LifeExpressSample Rate-Occupation Table 2 (Farmer)
Waiting Monthly Benefit Guaranteed First Day Approximate With Return Period Benefits Period Insurability Accident Premium Of Premium Option Coverage (Per Thousand)
Age 25 “Short Term” Disability 30 days $1,000 2 years X X $25 $30 “Long Term” Disability 90 days $1,000 to age 65 X $35 $45 Age 35 “Short Term” Disability 30 days $1,000 2 years X X $30 $43 “Long Term” Disability 90 days $1,000 to age 65 X $42 $65
Age 45 “Short Term” Disability 30 days $1,000 2 years X X $42 $77 “Long Term” Disability 90 days $1,000 to age 65 X $60 $123
Age 55 “Short Term” Disability 30 days $1,000 2 years X X $70 $235 “Long Term” Disability 90 days $1,000 to age 65 X $76 $300
Elimination Period: Waiting period before benefits begin.
Benefit Period: The length of time benefits are payable.
Guaranteed Insurability Optional Rider: Opportunity to increase disability income coverage every 2 years without evidence of insurability.
Retroactive Injury Benefit: If disability is due to an injury and total disability occurs within 30 days of the injury, the rider will pay from the date of the injury.
54%50%
45%40%
33%
0%
20%
40%
60%
Age 30 Age 35 Age 40 Age 45 Age 50
Chances of Disability“Chances of suffering a disability lasting 90 days or longer before age 65.”
What Classes are Sold Most
37%
1%15%
37%
10%
Class 5
Class 4
Class 3
Class 2
Class 1
Office workersCPAComputer AnalystsOffice ManagersAnd more
Farmers,
Electricians,
Carpenters, and more
Job A or Job B?
Which job would you prefer?
$2,000$0If Disabled
$2,950$3,000While Working
Job Offer BJob Offer AMonthly Income
Occupation Classifications
• Class 5: Service, Administrative, Managerial5 year own occupation definition
• Class 4: Specialized Medical/Technical
2 year own occupation definition
• Class 3: Supervisory, Moderate Physical
2 year own occupation definition
• Class 2: Farmers / Skilled Trade
2 year own occupation definition
• Class 1: Heavy Labor, Hazardous Environment
2 year own occupation definition
Comparison of Disability Plans
MN Life Old Mutual Illinois Mutual
Eligible Age to collect benefits If disabled, under age 60 If disabled, under age 60
Partial disability benefits? No No Yes
Waiting Periods? 90 days 90 days30, 60, 90, 180 days
Maximum amount of Benefits? $833/month $3000/month $8000/mo.
Length to collect benefits?
Up to 3 years, if under age 51Up to 2 years, at ages 51-55Up to 1 year, at age 56-59 2 years
6 months, 1,2, 5, 10 years, to age 65
Waiver of Premium? Yes Yes Yes
Special Risk Coverage? No No Yes
Business Expense Coverage? No No Yes
Benefits based on Herd Size? No No Yes
Benefits based on Acres of Land? No No Yes
Coverage for spouse? No No Yes
Coverage for employees? No No Yes
Return of Premium? No Yes Yes
1st day accident coverage? No No Yes
•Farmers’ Disability Income Solutions •
Illinois Mutual has offered progressive DI solutions to farmers for many years. Many farmers capitalize on farm depreciation and expenses so little or no reportable income is shown for federal income tax purposes. Illinois Mutual will consider coverage without financial documentation by using herd or acreage size to determine the monthly benefit amount that can be offered.
• Farmers are occupation class 2.• Farmers are eligible for ALL elimination periods and benefit periods. • This chart can be found on page 70 of the DI Guide Book.
Farm Size
(acres)Herd Size
(head)
Monthly Benefit Amount
240+ 24-49 Up to $1,200
360+ 50-74 Up to $1,500
500+ 75+ Up to $2,000
•Farm Spouse Disability Income Solutions•
Illinois Mutual also offers coverage available to farm spouses actively working and participating in the farm operation a minimum 30 hours per week. Illinois Mutual will consider coverage without financial documentation by using herd or acreage size to determine the monthly benefit amount that can be offered.
• Farm spouses are occupation class 2. • Farm spouses are eligible for all elimination periods and 6 month, 1 or 2 year benefit periods. • This chart can be found on page 70 of the DI Guide Book.
Farm Size
(acres)Herd Size
(head)
Monthly Benefit Amount
240+ 24-49 Up to $400
360+ 50-74 Up to $600
500+ 75+ Up to $800
•Individual Income Protection GR21•
• Maximum Issue: $8,000/month all occupations
• Elimination Periods: 30, 60, 90 and 180 days
• Benefit Periods: 6 months, 1, 2, 5 & 10 years, To age 65
• Most commonly sold product
•GR21•Optional Benefits and Riders
• Retroactive Injury Benefit
• Activities of Daily Living Rider
• Guaranteed Insurability Option Rider
• Surrender Value Rider--#1 Seller!
• Residual Disability Rider
• First Year Monthly Benefit
• Cost of Living Adjustment Rider
• Integrated Monthly Benefit Rider
•Farmers & Business ExpenseProtection BE21•
Business Expense DI is designed to reimburse usual and on-going
monthly business expenses during a disability. Some of the common
expenses that may be covered under the plan for farmers include:
• Utilities—for the barn and shop
• Depreciation
• Rent/lease payment for acreage farmed- interest but not principal
• Property and payroll taxes
• Irrigation/water systems expenses
• Veterinarian bills
•Business Expense Protection BE21•
• Guaranteed Renewable to Age 65
• Maximum Issue: 100% of Actual Business Expenses
– Based on percentage of ownership
– Up to $10,000/Month
– Farmers not providing documentation- up to $2,000/month
• Elimination Periods: 30, 60 & 90 days
• Benefit Periods: 12, 18 & 24 months
• Optional Benefits & Riders
– Retroactive Injury Benefit
– Surrender Value Rider
– Guaranteed Insurability Option
• 5 Reasons to Purchase •Business Expense Protection BE21
• The premium is tax deductible as a business expense. Not to mention it’s affordable!
• The benefits received under the plan are taxable. However, they are used to pay tax deductible business expenses creating a wash.
• By continuing to pay the ongoing monthly expenses, the business remains intact and viable until the owner returns to work or sells the business.
• Benefits are paid as a reimbursement for business expenses each month. If the client does not receive the full benefit in a month, the remaining benefit amount may carryover and extend the benefit period, if the client remains disabled.
• Your client is eligible to receive a 5% discount on an Illinois Mutual individual DI policy (Guaranteed Renewable GR21), and the BE21 when both policies are submitted at the same time and issued. The 5% discount applies to both policies. Together they cover the client’s net income and business expenses.
•Special Risk Income Protection SR21•
Designed for those with certain medical conditions.
• Guaranteed Renewable to age 65
• Maximum issue: $8,000/month – Recently Increased!
• Elimination Periods: 30, 60, 90, 180
• Benefit Periods: 2 or 5 years–Graded Benefits for First 2 Policy Years
• Optional Benefits and Riders–Partial Disability Benefit–Surrender Value Rider–Integrated Rider - Now Available on a five year plan!
• See DI Guide page 33 for acceptable medical conditions.
•Special Risk BusinessExpense Protection SRBE21•
Designed for business owners with certain medical conditions.
• Guaranteed Renewable to age 65
• Maximum issue: $8,000/month—recently increased!
• Elimination Periods: 30, 60, 90
• Benefit Periods: 12, 18 or 24 months
– Graded Benefits for First 2 Policy Years
• Optional Benefits and Riders
– Partial Disability Benefit
– Surrender Value Rider
Most Sold Optional Benefits & Riders
• Surrender Value Rider
• Guaranteed Insurability Option
• Retroactive Injury Benefit
• Activities of Daily Living Rider
•Return of Premium DI• It’s a Winning Solution
Illinois Mutual offers Return of Premium DI! With the Surrender Value Rider (SVR) on the DI policy you can “mistake proof” the DI sale and make it return of premium DI.
With the SVR, we return 100% of the premiums paid into the policy, less any benefits paid out, at age 65. For example,
Age 25
Without Return of
Premium TermWith Return of
Premium
Total Annual Premium $708.60 $883.20
Total Premium Paid to Age 65 $28,344 $35,328
If No Claims, Return of Premium at Age 65
$0 $35,328
Age 55
Without Return of
Premium TermWith Return of
Premium
Total Annual Premium $1,745.40 $5,818.80
Total Premium Paid to Age 65 $17,454 $58,188
If No Claims, Return of Premium at Age 65
$0 $58,188
•GR21, IL Rates, Class 2, NT, 60 day, Age 65 BP, $1,500 Monthly Benefit, “With Return of Premium” includes the Surrender Value Rider
DI Underwriting
• Personal History Interviews (PHI)
• Conducted @ $1,000+ benefits
• Assist in verifying information
• Financial Documentation
• W2 employees required on $4,000+ benefits
• 2 years tax returns, all schedules for self-employed
• Medical Requirements
FCS LifeExpress Flow Chart
FCS Staff Completes Insurance Request Form
Sends copy to Point Person
Transmits to FRG VIA FAX to
651-636-6886 or via email to
FRG Manages:
•Premium Collection•Commissions
•Data•Service Issues
FCS LifeExpress Case Manager
•Completes application
•Orders underwriting requirements
•Sends FCS LifeExpress kit to applicant for signature
•Manages case to issue
Case Manager emails Point Person when policy is issued to share delivery method and obtain booking date, CIF, Loan #, Loan Officer
Code, Office Code, and Loan Amount
FCS LifeExpress Case Manager:
•Interviews customer
•Discovers goals
•Reviews health status
•Creates customer spreadsheet
•Reviews results with customer
Mails or emails informational pack to
customer for review and consideration
Give customers FCS
LifeExpress Brochure
Farm Credit Services Member Discount
• AgriBank has negotiated for Farm Credit Services a Association discount a 5% for it’s members and employees.
• This allows Associations to deliver products and services that exceed alternatives in the marketplace.
Door Opening Questions
What would you consider your most valuable asset?
This is a thought provoking question. To help your client to visually prioritize, take them through the “Your Priorities” sales concept.
Another way to identify this is to multiply their current earnings by the number of years until retirement.
Door Opening Questions
What would you consider your most valuable asset?
This is a thought provoking question. To help your client to visually prioritize, take them through the “Your Priorities” sales concept.
Another way to identify this is to multiply their current earnings by the number of years until retirement.
Door Opening Questions
If you were to retire today,how long would your retirement last?
Disability insurance is not retirement but in either case you stop working. With a disability this happens by chance not by choice.
If your client could retire today they probably would. But what if they were forced to stop working? How would they be able to fund this “forced retirement?”
Door Opening Questions
If you were sick or hurt and unable to work, how would you get paid?
Use the terms “sick or hurt”. These terms are more relatable and you’ll find people will respond more favorably.
Farmers are the All-American workers. Without
Farmers, America wouldn’t be what it is today. Your
farm clients can find progressive disability income
solutions with First Resource Group delivered
through FCS LifeExpress. We understand the way
they work.
Contact FCS LifeExpress for all your farm clients!
800-944-4282
800-316-4154