Starting July 15th, Principal is changing the individual disability insurance (IDI) Simplified underwriting program to make it better for you and your clients by changing when you need to collect financial information.
What's new
It's no longer about how much clients earn, but how much coverage they apply for and have inforce with other carriers (excluding group long-term disability [LTD]) - which means more clients can qualify for Simplified underwriting.
Now:
We only require financials if clients apply for coverage above our Simplified limits (listed in the chart below). For disability income (DI) insurance, we take into account any existing individual disability coverage they already have in place.
Before:
If a client earned more than $150,000/year Principal required financial documentation.
Simplified guidelines
| |
Disability Income (DI) |
Overhead Expense |
Disability Buy-Out |
Key Person Replacement
|
| Maximum
monthly
benefit |
$6,000 (issue)
$10,000
(participation) |
$10,000 |
$360,000
aggregate |
$360,000
aggregate
|
Maximum
issue ages |
50 (single-life)
64 (multi-life)
|
50 |
50 |
50 |
| Occupation
classes |
All |
All |
All |
All
|
Examples of how it works
- John applies for $3,000/month in DI with Principal and already has $4,000/month with another carrier. No financials are needed because:
- The $3,000/month he is applying for is less than the $6,000/month issue limit, and
- When you add the $3,000/month he is applying for with the $4,000/month he already has, it's less than the $10,000/month participation simplified limit.
- Susan earns $300,000/year and has group LTD that covers up to $10,000/month. She wants to purchase another $5,000/month in DI from Principal. In this case, she falls within our Simplified underwriting guidelines so no financial documentation is required. Here's why:
- She's applying for less than the maximum monthly benefit allowed for her income
- She's applying for less than the Simplified DI limit of $6,000/month
- Principal doesn't consider group LTD as existing coverage for Simplified
Don't forget
When you use the Simplified Sales Program with Principal, you:
- Can offer clients all product features (following our normal guidelines).
- Don't have to gather routine medical underwriting requirements.
- Leverage the TeleApp Interview process to expedite the timing (required).
- Receive full commissions.
Transition guidelines
Ask your underwriter to review any business received in the past 60 days. If the client falls within the new guidelines, we will not require financials.
Please CLICK HERE for more information
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