Want a Raise? All You Have to Do is Ask!
How to Tap the Income-Boosting Potential of the
Disability Insurance Policy's Future Purchase Option

Are you familiar with the phrase, "Have your cake and eat it too?" It's a figure of speech that states the obvious — in life, there's no such thing as a continuous flow of cake.

However, I believe there's an important exception to this "cake" rule. That exception is the Future Purchase Option (FPO) rider found in many disability insurance policies. If you've sold DI policies containing an FPO, every anniversary date could mean a repeat first-year commission (aka: cake). Yes, it's as simple as it sounds. Below is everything you need to know to give yourself a raise!

1. As you sell disability insurance policies, make sure they contain the FPO rider. This option (otherwise known as guaranteed insurability) allows insureds to purchase additional coverage, regardless of health, without the need for a medical exam or blood tests. The Future Purchase Option rider is a win-win for everyone! It allows clients to easily increase disability insurance coverage and it allows you to have MORE CAKE.
2. Maintain a calendar of your client's anniversary dates. Sixty days prior to each anniversary, send your clients a letter informing them of the impending option to increase coverage. Make sure your letter includes a list of good reasons that they may want to increase disability insurance coverage. Ask clients the following questions:
• Has your income increased over the past year? If you were disabled, would you now require a larger disability benefit?
• Have your obligations increased over the past year? For example, if you've purchased a new home or you've had a child, would it require a larger benefit to sustain your lifestyle than it would have previously?
• Can you afford more disability insurance coverage? If so, it's smart to get it now before any health issues arise and before your Future Purchase Option opportunities expire.
3. Send another FPO reminder letter to clients 30 days prior to each anniversary. In this letter, tell them that you'll call to follow up in the next couple of weeks. Make sure to point out all the latest disability statistics. They're quite compelling! Also, make sure your client understands that the Future Purchase Option doesn't last forever. It's available for a short period each year. Furthermore, the FPO rider expires when the policyholder reaches a certain age, as stated in the policy.
4. Call your clients to discuss their FPO options. If your clients are like many people, their income has gone up over the past year, and they'll definitely be interested in taking advantage of this special once-a-year offering. The illustration below explains how the Future Purchase Option typically works.
   
   Illustration:
• Your client's current disability insurance policy is for $10,000 a month of disability income coverage with an annual policy premium of $2,282.61.
• He can exercise the Future Purchase Option by applying for additional coverage up to $2,000 if he qualifies financially (e.g., his income is high enough). Remember, your client doesn't need to apply for the full FPO amount — he can apply for any amount up to the limit for which he financially qualifies.
• When you review your client's financial qualification, make sure to ask if there is other disability insurance policies in force because underwriters will be on the lookout for over-insurance issues.
5. Submit the application and income documentation (the latest tax return (1040) with all schedules to document income) prior to the policy anniversary date.
6. Enjoy your cake! If your client is eligible for additional disability insurance coverage, a new policy or endorsement letter will be issued, and you'll be well on your way to enjoying yet another piece of cake in the form of another first year commission!

As you can imagine, the Future Purchase Option represents a great opportunity to build your income level. But, the FPO can also represent a great opportunity for other brokers to get a foot in the door. Did you know that competing brokers can also offer your clients the Future Purchase Option? Many disability insurance policies contain the FPO. It's true – and if they do, they'll be enjoying your cake. Don't let this scenario happen to you. Be the first broker to tell your clients about this exciting upgrade opportunity.