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Disability Insurance Insights...
Our Economic Life Begins And Ends With Cash Flow
W. Harold Petersen
May 2013

Early human society was made up of hunters and gatherers. Mankind had no knowledge of or concern for cash and cash flow. We had not progressed beyond satisfying pending hunger and, outside of protection from the cold, clothing was only a mild concern. Planning had not yet been mastered; events and environment pushed us into hasty conclusions for immediate gratification…for survival.

Planning ahead and thinking about change became a revolutionary event. In the never-ending quest to make life and its trials better and more pleasurable, humans gradually recognized the value of trading their abilities or resources with each other for ownership of goods and services—bartering.

One person might be talented at building shelters, while another more successful as a hunter or fisherman. Meat or fish, in exchange for building a shelter, was a frequent commodity.

For preservation and safety, tribal instincts flourished and communal living developed. Then trade between villages began; however, sometimes simple barter was not possible. Some trade had to depend on future delivery because of current unavailability. A method of keeping track of these exchanges on a non-barter basis led to the development of currency, which provided a way for trade or exchange on a non-seasonal basis. Thus, goods and services could be exchanged for money.

The exchange of services and goods for money led to advances in creativity and, ultimately, the Industrial Revolution. This grand movement enticed people to leave the lifestyle of working the land for a living and exchange their time and their talent for a paycheck, which held the promise of a better way of life.

People were enticed to live closer to the places they work. Thus, life became more focused and an income with which to purchase a different lifestyle became an irresistible seduction.

As a result of the Industrial Revolution, hunting and gathering was forgotten and bartering quickly evolved the human race into an income society. It was no contest because money allowed us to buy:

 • Desirable food, rather than just something to sustain life.

 • Fashionable clothing that fit well and was comfortable.

 • Warm, comfortable and attractive homes.

 • Education and health care for our children.

 • Transportation, which also provided a new and exciting dimension to life called recreation.

We have now become a society of individuals relying on every dollar earned and, as such, we must protect our way of life and our income. In the event of a disability, we could lose everything; our lifestyle could dissolve before our eyes.

This economic problem of being disabled has been recognized for more than a century, and this recognition gave way to the invention of certain forms of insurance that provide an income cash flow to a disabled person.

Modern disability insurance provides solutions to the problems created by living life. The industry now insures virtually all occupational classes and provides adequate benefit amounts to replace cash for special needs like key person exposure, business overhead and mortgage and loan payments. There is even disability insurance to continue deposits to a retirement plan in dimensions unheard of a few years ago.

Today disability insurance benefits are reaching new heights, with monthly benefits of $100,000 or more and business agreements of $100 million or more.

Do people buy $100,000 per month DI policies? Yes, they do. Financial needs are proportional, based on earning capacity. Who buys $100 million of business insurance? The people who have that dimension of need!

Author's Bio
W. Harold Petersen, RHU, DFP
RHU, DFP, is founder and chairperson of Petersen International Underwriters. He is recognized as an expert in underwriting development and policy innovation for such products as high-limit disability insurance, residual disability benefits, cash-value DI, and the expanding field of disability financial planning. The life/disability industry has acknowledged his leadership as an author, educator, motivator and leader, and has bestowed upon him the Harold R. Gordon Memorial Award (NAHU), the Will G. Farrell Award (NAIFA Los Angeles), the Lifetime Achievement Award (IDIS) and the Distinguished Service Award (NAIFA CA). His extensive industry involvement includes NAIFA, LIMRA, NAHU and The American College, all on local, state and national levels as well as IDIS. Petersen can be reached at Petersen International Underwriters, 23929 Valencia Boulevard, Valencia, CA 91355. Telephone: 800-345-8816. Email: whp@piu.org.















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