Four Generations of Finding the Right Coverage for Cincinnatians
Photography provided by Diversified Brokerage Specialists
With deep roots in the insurance industry, Diversified Brokerage Specialists is celebrating its 70th anniversary this year.
The company is a four-generation family business with a niche as a wholesaler of life, disability and long-term care polices and annuities.
“We have a fine history as a business here in Cincinnati,” says Jeff Mohr, president and owner. “Four generations – how many businesses make it that far?”
Mohr’s grandfather, Bill Dignan, who founded the company as W.R. Dignan Associates Inc. in 1946, invented two of today’s best-selling disability insurance products in the U.S.
In 1954, Dignan introduced the concept of Key Man Disability, which was a forerunner to group long-term disability insurance. A year later, Dignan started Business Overhead Expense coverage, which was instituted into the U.S. Internal Revenue Code that year.
Long-term disability insurance can replace lost income, pay business expenses, buy out a disabled business partner and much more. The goal is to provide at least 60 percent of income on an after-tax basis until Social Security age, Mohr says.
Overhead-expense disability polices go a step further.
“If I’m a business owner and I’m disabled, and you’re paying me just $5,000 a month so I can keep my house, what’s going to happen to my business?” Mohr says. “I’ve got $10,000 a month in business expenses. I’m going to lose everything. I’m the main man; I’m the revenue generator. I’m the attorney, I’m the doctor, I’m the salesman. I’m going to lose all my employees. It’s a real problem.”
Mohr says the policy is designed to pay, for example, $10,000 a month more than the $5,000 that the individual disability policy would pay to cover such business expenses for up to two years. Then the business owner must decide whether to return to the business or sell the business.
“The beauty is, because of that $10,000-a-month policy, you still have a business to go back to,” Mohr says.
It’s that kind of service that has kept Diversified Brokerage Specialists in business for 70 years. (Diversified took its new name in 1981 to reflect changes in the industry at the time.) Mohr’s grandfather is deceased; his father, John “Jack” Mohr, who is retired, spent more than 30 years in the business; Mohr’s son, Shaun Mohr, 38, has worked at the company for eight years.
As a broker, the company shops policies for the best price and provides discounts for companies, group associations (such as the Academy of Medicine of Cincinnati, the Ohio State Bar Association and Cincinnati Dental Society) and consumers, who are referred to Diversified by insurance agents. For instance, if a consumer has a difficult time finding coverage because of a medical condition or other factors, an agent enlists Diversified to find a carrier that will accept the risk.
Business owners face another set of risks because of the value of their enterprises.
“We see our products pay all the time – life, disability, long-term care, annuities,” Mohr says. He brokered a policy for a successful Cincinnati business owner who recently died in an accident.
“We had that business owner covered. His business, his family will be taken care of,” Mohr says. The policyholder “didn’t even know who we are – he knows his agent, who sold it to him. For us to see that, it’s very rewarding. What we do is important.”
Diversified Brokerage Specialists is located at 9670 Kenwood Road, Blue Ash, OH 45242. For more information, call 513.621.9650 or 800.621.6161, or visit the website at www.dbs50.com.
An Important Executive Benefit that is Often OverlookedWritten by Jeff Mohr, RHU, CLTC
Too many professionals and executives have a false sense of security when it comes to disability insurance. The time to find out how much disability benefit you will receive is now, not when you are hospitalized.
If what you are told or you think that you have is 60 percent of salary, think again. Never accept the 60 percent answer. Here’s why. How much of your salary is really covered? Does the 60 percent benefit have a maximum limit or monthly cap? Is the 60 percent taxable? Is your incentive pay (bonuses, pension contributions, health insurance, etc.) covered at 60 percent also? What is the definition of a disability (just two years in my occupation)? What if I am only partially disabled?
You owe it to yourself and to your family to know exactly what you will receive and for how long if you are disabled.
The answer in many cases is an Executive Disability Insurance Policy. It supplements any disability insurance shortfalls that you have through your employer. You can purchase this policy on your own for a very reasonable cost since you are supplementing existing coverage and not having to purchase the full amount on your own. Benefits received from a personal disability policy are free from income tax. If you can convince your employer to pay for such a policy, the benefits will be taxable unless you elect to pay tax on each premium. If you do, then the disability benefits will be tax-free.
In many cases, employers themselves fall into this category. Therefore, it is reasonable that the employer sponsor such a plan for highly compensated employees. By doing so, premium discounts and in many cases guaranteed standard issue underwriting is available to provide disability protection to employees who would otherwise be declined or rated up through traditional individual underwriting. Here is where you really have something very important and attractive – high quality disability insurance at a discount, with liberal underwriting, which provides employees with pre-existing conditions full coverage even for those conditions. What a powerful combination and benefit.
Executive Disability Insurance Policies have significant benefits over employer provided group long-term disability insurance as well. The premiums can never be increased and the policy is fully portable, meaning that the employee can take the policy with them wherever they go and the price will always stay the same until retirement age. Unlike group disability, the benefits do not reduce with Social Security, worker’s compensation or other disability benefits. You are also protected in your occupation for the entire benefit period. Features like partial disability, residual disability and inflation increases are also common and provide better protection than group disability insurance provides.
Providing an income for your family is too important to be taken lightly. I have seen many disabilities, some with no disability insurance and fortunately many with disability insurance. The differences are life-changing. Just a 24-month disability can have lasting consequences without proper disability insurance. I strongly suggest reviewing your disability insurance protection. Employers should also take the time to make sure that their highly compensated and valued employees have the proper disability coverage. Supplementing your group long-term disability plan with an Executive Disability Insurance plan is recommended.