The age of the insured determines the premium the company charges and may limit the benefits available. Rates are calculated using the age nearest the insured's birthday. Since the incidence and length of disability increases with age, there are limits on benefits offered to older prospects.
Sex
Claims experience has shown that while the average duration of disability is the same for men and women, the frequency of claims is greater for women. Therefore, women are generally subject to higher rates. This pricing method is the opposite of life insurance pricing for which women pay less because, on the average, they live longer than men do.
Income
The purpose of selling disability income insurance is to protect the prospect's earning power, so income plays a large role in determining benefit level. Good financial underwriting is critical, and various levels of financial documentation are required. Both the Marketing Guide and the Premium/Underwriting page of the DI proposal outline the specific requirements for each case.
Disability income insurance is designed to provide benefit amounts that allow insureds to maintain a standard of living appropriate to their income levels, without discouraging their efforts to return to work as soon as possible. Therefore, policies are usually not written for over the amounts listed in the Issue & Participation limits chart in the Marketing Guide. The DI proposal software automatically calculates the insured's maximum eligibility based on income and other factors. A rider called "Guarantee of Physical Insurability" can be added, allowing for increasing benefits as the insured's income increases.
Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.