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October 01, 2009 at 04:00 AM
In the midst of all the troubling news about insurance and insurance companies, there’s a ray of sunshine: disability insurance is no longer playing hard to get. Of course, that’s because sales are down substantially in most categories, according to John Ryan of Ryan Insurance Strategy Consultants in Greenwood Village, Colorado. “In the physician and dental markets, things are status quo, but in all other areas sales are down significantly: 30% to 35%,” Ryan says.
Such a drastic drop in sales has led to a concerted effort within the disability niche to write new business. This has led to easier underwriting, a drop in price, and more benefits for less money. “Except for the economy,” says Ryan, “things are looking great–all the disability companies are making enhancements now,” probably because sales have been down so much. The second half of 2008, all of 2009, and even projections for 2010 have led to strong efforts to promote new business in the field.
Underwriting has been relaxing gradually since 2005, Ryan explains, and now with higher benefit limits as a percentage of earnings, “good times are back in the disability area.”
Companies offer two basic types of policies: one with a guaranteed price and one that’s guaranteed renewable. Guaranteed renewable policies, which can’t be canceled but don’t carry a price guarantee, run about 35% cheaper for those who don’t worry about future rate increases, or who are willing to bet against them. Women, Ryan points out, pay 30% more than men for policies, so a guaranteed renewable policy is usually good for them. Guaranteed renewable would also be good for older clients, he explains, because it’s less likely that a rate increase would have as much of an impact on someone who’s 50 as on someone who’s 30.” Guaranteed renewable policies present a way to get quality coverage at a deep discount. Not many companies offer them, he says, adding that Standard Insurance of Oregon offers “the best guaranteed renewable product in the business right now.”
