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The Story of the FIO and the Good Insurance AgencyOnce upon a time, in a land far, far away (California), there was a beautiful fee-only financial advisor. We’ll call her Fee-Ona. In the ancient days of February 2015, this advisor met a new client named Doc, who is married to a beautiful stay-at-home wife and has two sprightly children. Doc is an MD and a PhD earning more than $900,000 annually. When Fee-Ona had her first planning meeting with Doc, she learned of a Guardian disability insurance (DI) policy Doc purchased in April of 2004 when he was a resident. It would pay him $1,000 a month if he went out on claim. As fate would have it, Fee-Ona had just begun her fairy godmother work with Doc on his comprehensive plan when she attended the LLIS Insurance Academy in Tampa. It’s where all smart advisors go in February each year for insurance education and networking with peers. Well, Fee-Ona is a very good student and paid attention to everything that was presented. She heard Kathy Bilodeau talk about DI and learned a new term: FIO. It stands for Future Increase Option, and it allows people to purchase additional disability coverage every year if their income has increased, when they change jobs, or if they lose group coverage. And without medical underwriting! Because Fee-Ona is a smart cookie, she asked Kathy to do a policy review on Doc’s DI policy. Kathy was astonished! This man earned $900K+ and would only get $1,000 a month if he became disabled (or ate a poison apple, a la Sleeping Beauty), unable to work, not earning a paycheck! And he had no other coverage. Why, if Doc were to go on claim now, he and his family would be in big trouble, scavenging for food and shelter. (Maybe a bit extreme, but do you really believe Cinderella’s pumpkin turned into a golden carriage?) So Kathy (our heroine) and Fee-Ona got to work. “How much would Doc need to survive now based on his current expenses?” asked Kathy. “Why, $300,000 a year, Kathy!” replied Fee-Ona. Now, as we know, every story has a villain. In our story, it’s Apathy. Apathy sold Doc this policy in 2004, got his premium, and left … never to be heard from again (like the elves in the Shoemaker story). Classic case of gluttony. So Kathy and Fee-Ona worked their magic and got LLIS appointed as the agent of record. (Well, by magic I mean a simple form; but without it, LLIS would not have been able to help and Doc would have been forced to seek out the evil Apathy.) Kathy quickly realized Doc’s policy had $9,000 in FIO that he could have exercised after just the first year! That means his disability payments would have been $10,000 a month if he went on claim, not the measly $1,000 a month. Fortunately for Doc, he hadn’t become disabled. After all, who can live on just $1,000 a month? (Except Jack, who had only one cow before the beanstalk incident.) But it’s not all roses and fairy dust. Doc had to act before age 45 to exercise the full $9,000. Since he is now 45½, he could only exercise 1/3 of that amount ($3,000). So Kathy got to work. Like any good heroine, she realized she could do more than exercise that $3K to save this man and his family from losing their riches if he became too ill or too injured to work. So she’s helping Doc:
Our tale ends like all good fairy tales: the good guy wins. Doc gets the coverage he needs and desires and is able to rid himself of the evil Apathy. Fee-Ona gets satisfaction from knowing she has performed a noble deed. And Kathy awaits her next chance to use her powers for the betterment of humanity. It’s easy to reach Kathy to solve your clients’ DI problems. No yellow brick road to follow. Just call her at 877-254-4429 or email her. And … earlier this year, Kathy got herself another defender of income. You can also contact Brian Ciccarelli for assistance with DI. (Check out defendyourincome.org for more disability insurance fun.) |
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Products available through LLIS Term Life Insurance | Low-Load Universal Life (Individual & Survivorship) | No Lapse Guaranteed Univeral Life (Individual & Survivorship) | Long Term Care Insurance | Disability Insurance | Critical Care Insurance | Low-Load Variable Annuity | Immediate and Fixed Annuities | Low-Load Variable Universal Life | Hybrid Life/LTCi | Hybrid Annuity/LTCi (Not all products available in all states) For a list of current providers, visit the Advisor Tools section of our website and click on |
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