Sharfman, senior managing director of NFP Insurance coverage Options, a big insurance coverage distributor, says advisors ought to image a enterprise proprietor with business gear that generates $2 million in income per 12 months.
“Don’t you suppose they might be sure that machine is insured correctly?” Sharfman asks.
Sharfman says purchasers ought to defend their capability to earn $2 million per 12 months as rigorously as they might insure the high-revenue machine.
Sharfman has a bachelor’s diploma from Babson School. He began out in insurance coverage as an agent at MetLife, and he has labored for NFP and predecessor firms since 1995. He final talked to ThinkAdvisor concerning the implications of Safe 2.0 for long-term care planners.
He answered questions through e mail about how he sees the person incapacity insurance coverage market now. The solutions have been edited.
THINKADVISOR: What’s NFP doing in the incapacity insurance coverage market?
HOWARD SHARFMAN: NFP has extraordinarily robust ties with the complete incapacity insurance coverage market and can be thought of by the carriers as a vital dealer. Now we have a major presence within the group, particular person, govt and high-limit DI markets.
Within the particular person, govt and high-limit DI markets, we sometimes work with govt and specialist occupations, along with working with athletes, sports activities groups and entertainers.
NFP works with all vital suppliers, together with Principal, The Commonplace, MassMutual, Guardian, Unum, Ameritas, Mutual of Omaha and Lloyds Underwriters.
How does the high-limit incapacity market work?
The “customary” markets for DI will sometimes difficulty as much as $20,000 to $25,000 in month-to-month profit, on prime of current group protection, which usually offers from $10,000 to $25,000 of protection, relying on the corporate measurement and executives’ earnings.
For executives nonetheless capped by the primary layer of group protection and the second layer of particular person protection, there may be extra high-limit protection obtainable.
Excessive-limit protection can supply $50,000 to $200,000 per thirty days in extra protection, and bigger month-to-month advantages additions could also be obtainable for people with contracted earnings over $10 million yearly, comparable to athletes and entertainers.
Typically, high-limit insurance policies have advantages durations of 5 to 10 years.
That is typically additionally supplemented with a lump sum quantity, from $1 million to $5 million, if the incapacity persists to the top of the profit interval.
How does competitors look within the particular person DI market?
There are fewer suppliers than there have been 10 to fifteen years in the past. However it’s a aggressive market that should be shopped to verify the shopper obtains the most effective protection on the proper worth.
Within the white-collar classification and the assorted medical specialties, there are a subset of various carriers that specialize out there.
The place do the candidates come from?
Most incapacity insurance coverage gross sales are “advisor-driven,” whether or not the transactions begin with an accountant, monetary planner or normal insurance coverage agent doing a danger evaluation.