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July 05, 2011 at 08:00 PM
When it comes to disability insurance, women pay approximately 40 percent more than their male counterparts. Why? One word: claims. Rates are derived from claims experience and women tend to be disabled 40 percent more often than men.
The opposite is true for life insurance. Women live longer and pay less for their life insurance premiums.
So if you are working with women in the market to purchase disability insurance, what can you do to try to reduce the premiums?
Prioritize. If your client is on a tight budget, find out what is most important to them.
- Could they get by with a lower benefit now and increase it later?
- Do they need a true “own occupation” definition of disability?
- Would a guarantee renewable policy be sufficient?
- Is it critical to have a COLA rider at this time?
- Could they get by with a shorter benefit period?
Look for discounts. The most significant type of discount is an employer-sponsored discount that provides unisex rates. Unisex rates alone will reduce female rates by approximately 35-40 percent. Add another 20 percent for employer-sponsored rates and your clients will save significantly. Each company has different requirements to set up the discounts. Companies typically require 3-5 people from the same employer to apply for the policy simultaneously in order to qualify for the discounts. You can also work with associations to incorporate discounts that can help save.
