RGR_THE INSURANCE LETTER Penton Media June 16, 2009 If you want to view this on the web go to: http://enews.penton.com/enews/registeredrep/v/721 FEATURE STORY --Disability Insurance Sales Rise By Alan Lavine Sales of individual guaranteed renewable disability insurance policies have been holding up well during the recession, and are expected to grow at an attractive clip. Higher-income individuals are also buying bigger-ticket policies. Over the past four years, sales of individual guaranteed renewable coverage grew at an annual rate of 5 percent to $211 million in 2008, according to according to insurance trade group LIMRA. Sales of group coverage, as well as non-cancelable individual coverage, declined in the first quarter, but remained up about 10 percent over the same period. Karen Terry, manager of individual product research at LIMRA, believes more will get disability coverage as the economy improves. "There is a big opportunity for producers to get into this niche market," Terry says. "It is a concentrated market with few carriers and products." Meanwhile, disability insurance premiums increased 3 percent on guaranteed renewable policies in the first quarter of 2009, according to LIMRA, Windsor, Conn. A "guaranteed renewable" policy is a lower-cost policy that can't be canceled by the insurance company as long as premiums are paid. Premiums can be raised, however, for an entire class of policyholders. By contrast, non-cancelable coverage is more costly because it can't be canceled and the premiums are guaranteed not to increase. The market for disability insurance is huge. Some 110 million Americans lack long-term disability insurance coverage, according to the National Association of Insurance Commissioners, Kansas City, MO. Yet one of five to seven persons could become disabled due to illness or injury over the next one to five years, according to a new study called, "The Impact of Disability." The study was conducted by Milliman, a New York based actuarial consulting firm, and sponsored by The Life and Health Insurance Foundation for Education and American's Health Insurance Plans. Almost one-third of workers say they would have a difficult time supporting themselves in the event of disability in the current job market, according to the study. And 74 percent say they would face financial problems after six months of a disability. Consumer concerns over their livelihoods have increased the awareness of the need for income protection. Meanwhile, sales commissions are attractive for disability insurance. Depending on the insurance company, the agency and the broker-dealer, a producer can get about 45 percent to 70 percent of premiums paid over the first few years of a group policy and trailing commissions of 17.5 percent. On the individual side, first-year commissions can run to 100 percent. Renewal commissions from years 2 though 10 are around 17.5 percent. After that, trailing commissions run about 5 percent. Read the full story here To view the full article go to: http://registeredrep.com/newsletters/insuranceletter/disabililty_insurance_sales_rise0616/ Advertisement ---------------------------------------- http://clk.atdmt.com/DEN/go/151485902/direct/01/ ---------------------------------------- Most Popular Stories ---------------------------------------- *The Jewish Clause: Putting conditions on an inheritance into a will. 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