Did you know that most paycheck protection policies have a “no cost” future purchase option rider (FPO) that represents your chance for a repeat first-year commission every three years?
This option (also referred to as guaranteed insurability) allows policyholders to purchase additional paycheck protection coverage without the need for a medical exam or labs. The FPO is a win-win for everyone!
Here’s how it works:
Every three years, 60 days prior to the date the FPO can be exercised, your clients receive a letter informing them that they have an opportunity to increase their coverage. Source Brokerage, Inc., also sends you an email notice informing you when your clients have an FPO they can exercise. When you receive the notice, send your clients an email or a letter asking these 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 more paycheck protection to sustain your lifestyle than it would have previously?
- Can you afford more paycheck protection? If so, it’s smart to get it now before any health issues arise and before your Future Purchase Option opportunities expire.
Send another reminder letter 30 days prior to the anniversary. In this letter, 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 up to 30 days after the policy anniversary. Furthermore, the FPO rider expires when the policyholder reaches a certain age, as stated in the policy.
Schedule a call with your client. Explain how FPO works. In a nutshell, your client can apply for additional coverage if his income is high enough. The client doesn’t have to apply for the full FPO amount – he can apply for any amount up to the limit for which he financially qualifies.
In your conversation, also gather the information you need to provide a quote.
- What is your current income?
- Do you have any other individual DI policies in force or group LTD through your employer?
After your conversation, request a FPO quote and state-specific application from your disability income specialist at Source Brokerage, Inc. Please also refer to your disability income specialist at this time to advise the appropriate income documentation needed when submitting the application to avoid any potential delays in financial underwriting.
Submit the FPO disability insurance application and income documentation prior to the policy anniversary date.
Enjoy your raise! If your client is eligible for additional paycheck protection, a new policy or endorsement letter will be issued, and you’ll be well on your way to enjoying yet another first year commission!
The Future Purchase Option provides a great opportunity to build your income level …. But only if you follow these four easy steps to give yourself a raise!