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Disability Income Protection for Physicians:Protecting Your Income & Your Practice

Producer Name

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What We’re Going to Cover Today

• Protection for your personal income—Individual Disability Income insurance

• Protection for your practice—Business Overhead Expense coverage

• Funding a buy-out if you or one of your partners becomes permanently disabled—Disability Income Buy-Sell coverage

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Protecting All of Your Assets

You insure your car and your home . . . but are you truly protecting your income and your practice?

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The Impact of a Disability

What would happen to your standard of living if you became disabled, either by illness or injury, and unable to work in your current

occupation?

Think about this…A 40-year-old physician earning $200,000 today will

earn almost $9,000,000 in the next 25 years, with only 4% increases each year!

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A Disability Can Happen to Anyone

Consider the following . . .

• 1 in 3 working Americans will become disabled for 90 days or more before age 651

• The chances of an individual becoming disabled is 2 to 3 times more likely than the risk of premature death1

• Approximately 20% of all business failures are a result of the owner’s poor health2

1 NAIC, Commissioner’s Individual Disability Table A, 1985.

2 Marketing Disability Income in Today’s Changing World, Life Association News, August 1, 1998.

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Think You’re Already Covered?

Do you already have group or association coverage?

Great Start!

But group and association plans often have limitations,

such as:

– Restrictive definitions of disability

– Limits on length of coverage for Mental, Nervous, Drug & Alcohol disorders

– Caps on monthly benefit amounts

– Increasing premium bands

– Limited portability

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MetLife’s OMNI Advantage

• MetLife’s premiere disability income insurance product

• Noncancelable & Guaranteed Renewable to age 65

• Maximum benefit and premium flexibility

• “Own Occupation” definition of disability

• Mental, Nervous, & Drug Disorders treated as any other illness

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Choosing the Right Policy

Key questions to ask when choosing a policy…

• How do you qualify for the policy?

• How much can you purchase?

• Is the policy Noncancelable?

• How is disability defined?

• When will the policy pay and for how long?

• What optional features can you add to your policy?

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Qualification

How do you qualify?

• Medical History

• Occupational Duties

• Financial History

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Benefit Amounts

How much can you buy?

• Usually enough to provide total benefits of about 65% of your net earned income, after business expenses (if applicable) and taxes

• Your benefits are received tax-free if you have paid the premiums with after-tax dollars

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Noncancelable Policies

Is the policy Noncancelable?

• As long as you pay your premiums on time:

– Your coverage cannot be canceled; and

– Your premiums cannot be changed until the policy anniversary on or after your 65th birthday

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Definition of Disability

How Is Disability Defined?Social Security: Unable to work in any occupation; your

disability must be expected to last for at least 12 months or result in death

“Any Occupation” (in some individual, group, and association plans): Prevented from performing any occupation for which you are, or become, reasonable fitted by education, training, or experience

MetLife’s “Own Occupation”: Prevented from performing the material and substantial duties of your regular occupation, not gainfully employed, and receiving appropriate care by a physician

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When Will the Policy Pay & For How Long?

It’s your choice when and for how long benefits are paid…

• After an Elimination Period of:

– 60 days

– 90 days

– 180 days

– 365 days

– 730 days

• Benefit periods available are 2 years, 5 years, to age 65, to age 70, and Lifetime Benefit*

*Lifetime Benefit for Total Disability can be added as an optional rider.

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What Optional Features Can You Add?

Important optional riders that you can add to your policy include:

• Guaranteed Insurability (GI) Benefit

• Cost of Living Adjustment (COLA)

• Residual Disability Benefit

• Catastrophic Disability Benefit

• Transitional Your Occupation Benefit

• Other Optional Benefits Available

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What If You’re Just Starting Out?

*Minus other individual or group coverage current inforce. For Residents and Interns, only in force individual coverage will be subtracted from the limits above.

Starting Practice Limits*

Occupation Total Monthly Benefit

First Year Physician (MD or DO) $4,500Resident (MD or DO) $3,500Intern (MD or DO) $2,500Senior Year Medical Student (MD or DO) $2,000

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What Would Happen to Your Practice?

What would happen if you couldn’t return to work for six months, or even a full year?

Without revenue coming in, how long could your business continue to pay

monthly expenses?

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Protecting Your Practice

Is your practice protected with Business Interruption Insurance?

– Business Interruption Insurance provides revenue to keep your practice afloat if your place of business is damaged by a catastrophic event—such as fire, flood, or vandalism—if you have to vacate the premises.

But what if YOU were interrupted?

Luckily, there is insurance for that, too!

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Business Overhead Expense Coverage

A Business Overhead Expense policy helps protect your practice in the event that something happens to you—the person who keeps revenue coming in•It helps to pay for your share of the normal and customary expenses of your practice, such as rent, utilities, and staff wages, if you become injured or ill and can no longer work•You can focus on your recovery and not have worry about losing your business

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Features of MetLife’s Expense Plus Policy

• Noncancelable & Guaranteed Renewable to age 65

• Benefit periods from 12 to 24 months

• Built-in Partial Disability Benefit

• Salary of your replacement is a covered expense, minus gross income generated by that person

• Guaranteed Insurability Option rider available

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What’s Covered?

Examples of covered expenses include:– Rent, utilities, & staff wages

– Maintenance services

– Taxes and mortgage interest on business property (that you own and use in your business)

– Property and liability insurance

What’s not covered:– Your salary or that of a partner

– Income taxes

– Cost of implements used in your occupation

– Payments on mortgage principal

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More Advantages to Business Overhead Expense Protection

• Helps you protect one of your largest assets

• A great value—premiums average 1.5% of covered expenses

• Premiums for the policy are tax deductible

• Benefits for deductible expenses means no net tax liability

• Premiums are paid out of the business checkbook—not out of your personal checkbook

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But What If a Disability Is Permanent?

Does your Buy-Sell Agreement include language about a disability?

How would you fund a buy-out if you, or one of your partners, becomes disabled?

MetLife’s Buy-Sell Business Protector helps protect all parties:

– The disabled partner

– The remaining partner(s); and

– The practice!

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The Chances Are High…

Age 1 2 3 425 58% 82% 92% 97%30 54% 79% 90% 96%35 50% 75% 88% 94%40 45% 70% 84% 91%45 40% 64% 78% 87%50 33% 55% 70% 80%

Number of People in a Practice

Studies show that as the number of key employees increases, so do the chances that at least one will suffer a long-term disability before age 65

Based on NAIC Commissioner’s Individual Disability Table A, 1985.

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Buy-Sell Business Protector

• Provides cash to assist in the purchase of a disabled partner’s share of the practice

• Helps assure business continuity to patients and staff

Competitive Features

– Professional fee reimbursement

– Flexible benefit payment options

– Transfer of coverage

– Guaranteed Insurability Option rider available

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Choosing the Right Disability Income Insurance Carrier

MetLife’s financial stability and our commitment to providing disability income insurance to our customers has made us an industry leader

• Flexible products to fit your needs

• Competitive pricing

• Committed to offering Physicians comprehensive and affordable coverage

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Like most disability insurance policies, MetLife’s policies contain certain exclusions, waiting periods, reductions, limitations, and terms for keeping them in force. Ask your representative about

complete costs and details.

Metropolitan Life Insurance Company200 Park Avenue, New York, NY 10166

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Questions