Beyond LTD: Using Disability Insurance as Your “Trojan Horse” to Open Doors and Win Healthcare Professional Clients

This regularly updated blog post features scripts and processes you can use to leverage MGIS disability insurance products to win new business. Our most successful brokers use MGIS as a type of “trojan horse.” By approaching groups that employ doctors with a specialized disability product tailored for them, brokers gain trust and are able to offer other benefits to these groups as well.

Script 1: Do your prospects have a clear understanding of how their Group LTD contracts define ownership income? – 3/6/2023

Prepared by Keith Mangrum

Ownership income can account for 50%+ of a practice partner’s income. Several well-known Group LTD carriers account for ownership income received while disabled in a way that the owner claimant’s LTD benefit could be reduced to as little as $100 per month (as opposed to the expected $10,000 or $15,000 benefit)

This can lead to obvious problems down the line, and many healthcare groups are unaware of this shortcoming.

Use this process to educate groups and introduce MGIS disability insurance as a solution:

Ask your prospect this question:

“How does your current LTD policy account for K-1 income that you (or a partner) would still receive if disabled?” 

Out of 100 groups, I bet only one could respond with any kind of meaningful answer. Most benefit brokers sell LTD primarily as an employee benefit and are not aware of the potholes in an LTD policy encountered by owners and partners at claim time.  And don’t let them confuse including K-1 in PDE (Pre-Disability Earnings) with K-1 being an offset – it is not the same thing.

Explain the possibilities of how LTD policies handle ownership income.

Worst Case Scenario: The LTD benefit is reduced by a dollar-for-dollar offset for ownership income received while disabled (like Social Security Disability).

Somewhat Better: The LTD benefit is reduced by a dollar-for-dollar offset for ownership income received while disabled, but only if it is included as part of Pre-Disability Earnings (PDE). Note that removing ownership income from PDE can also reduce the total or partial LTD benefit.

A Little Better: Ownership income is included as part of Disability Earnings, making it an indirect offset to the LTD benefit (like part-time work earnings). However, this approach may also negatively impact the policyholder’s eligibility for benefits and result in no benefit being payable.

Most Desirable: No offset and not included in Disability Earnings, or an offset only if LTD + K-1 income is greater than 100% of Pre-Disability Earnings. This scenario is virtually impossible.

Ask your prospects for the current LTD policy and offer to provide them with a “policy audit.”

“If possible, I would like to perform a policy audit on your existing disability insurance policy to see if there are any gaps that need filling.” Most prospects will be willing to engage in this activity. It is an excellent opportunity to open the door to further conversations.

After this step, contact the MGIS Regional Vice President of Sales (RVP) in your area, who will provide a detailed policy analysis and recommend an MGIS solution.