Disability Buyout Insurance - Newbie Q

[doublejay]

Hey, I am new to Life and Disability Insurance and trying to make sense of it all...any help is appreciated.

Client wants Disability Buyout Insurance (anyone have any experience with that here?).

Here is the issue: Business is worth 6m so each (of the two) partners wants 3m in coverage.

Need 1 yr. elimination.

I was only able to find coverage for around 1.5m with any carrier and participation limits seem to max out at 2-2.5m.

Any ideas on how to get the full amount?

Can I go to Lloyd's or something like that after I buy the first 1.5m?

 

[dgoldenz]

Guardian will go up to $2M. What are the occupations?

 

[doublejay]

Guardian will go up to $2M. What are the occupations?

They were classified as 5A.

 

[LGilmore]

Again, what are their occupations.

Nobody's asking for names or addresses.

It's OK to be cautious but not to the point where nobody can help you.

 

[doublejay]

Again, what are their occupations.

Nobody's asking for names or addresses.

It's OK to be cautious but not to the point where nobody can help you.

I actually don't know all that much past the fact that they are 5A - they are executives of some sort (CFO, CEO or something?)

Do you mind me asking how it matters if I know the class?

 

[Norwayguy]

I actually don't know all that much past the fact that they are 5A - they are executives of some sort (CFO, CEO or something?)

Do you mind me asking how it matters if I know the class?

How do you know the class without the occupation. Not all carrier will rate the same which is why they asked for the occupation.

 

[njh_lfg]

Small business owners who use title of CEO/CFO rarely describes their work duties. For example, I have a client who says he is CEO but travels to client sites that use extremely hazardous chemicals which he comes into contact with. You need to know what their duties are because of what Norway said "not all carriers will rate the same".

Next, how do you know the company is worth $6m? Did they tell you this or do they have a valuation from a highly reputable source? (Rarely a company is worth what an owner estimates, similar to a home owner trying to sell) And if they are truly worth 6m how do they want to receive the benefit; lump sum or installments?

These questions are just the tip of the iceberg and quite frankly being in NY will limit some carriers ability to insure.

 

[doublejay]

Small business owners who use title of CEO/CFO rarely describes their work duties. For example, I have a client who says he is CEO but travels to client sites that use extremely hazardous chemicals which he comes into contact with. You need to know what their duties are because of what Norway said "not all carriers will rate the same".

Next, how do you know the company is worth $6m? Did they tell you this or do they have a valuation from a highly reputable source? (Rarely a company is worth what an owner estimates, similar to a home owner trying to sell) And if they are truly worth 6m how do they want to receive the benefit; lump sum or installments?

These questions are just the tip of the iceberg and quite frankly being in NY will limit some carriers ability to insure.

He is a CEO who sits in an office all day.

His company is clearly worth the $6m.

What is special about NY about disability buyout policies?

Main question really was: Will hitting the paricipation limits with a company (let's say MassMutual) and then going to Lloyd's for an additional million or so of coverage after the purchase of the policy ever cause issues at claim time for some sort of breach of participation requirements with MassMutual?

 

[njh_lfg]

I asked a question so I could better help but you are CLEARLY not interested in any assistance as you are focusing on an question that could be solved by picking up the phone and calling MM.

Not all companies offer a B/S contract in NY due to it not being an insurance friendly state.

Good luck.

 

[doublejay]

I asked a question so I could better help but you are CLEARLY not interested in any assistance as you are focusing on an question that could be solved by picking up the phone and calling MM.

Not all companies offer a B/S contract in NY due to it not being an insurance friendly state.

Good luck.

Actually did pick up the phone and call (a couple of co's before posting - and a couple after) my research has led me to confusion and that is why I was calling upon this (mostly) friendly board. Some reps made it seem like "do what ever you want after you buy our policy", some made it sound like "if we catch you buying above our I&P limits you can have issues at claim time" - I even had contradictions within same company. Two reps through out the term "anti selection" when I asked about buying extra from Lloyd's.

So was wondering if anyone had any experience.

Thanks for informing me about NYS being difficult I actually didn't know that. A real newbie and every tip is a help.

Peace and Love.