For many years, the disability income industry was dominated by two central, and essentially separate, approaches: group LTD and individual non-cancelable DI. Long term disability offered no-frills coverage to a broad-based clientele, while individual disability insurance provided richer benefits primarily to affluent professionals.
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In recent years, those distinctions have blurred. Greater flexibility, higher benefit limits, shorter elimination periods and other features have endowed LTD with many of the strengths of individual disability insurance - often at a significantly lower cost. With today's group long term disability products, you can provide outstanding benefits that meet a wide range of client needs.
But not all long term disability products are created equal. The following is a summary of some of the most significant features that make today's long term disability products so effective.
Total risk management Two pieces of legislation - the Drug-Free Workplace Act and the Americans with Disabilities Act (ADA) - have affected the way we view the role of disability protection. With their focus on employee well being and equal opportunity, the acts foster a total risk management approach that encompasses disability protection and return-to-work services.
The better carriers offer rehabilitation services designed to help disabled claimants return to work. Transferable skills assessment, work site modification, and ADA compliance counseling are among the important services a skilled rehabilitation unit provides.
• Employee assistance programs (EAPs) are another component of today's quality long term disability plans. While the Drug-Free Workplace Act highlights the need to help workers with personal or behavioral problems, many EAPs also offer management assistance programs that help managers confront employees who are causing productivity or morale issues at work.
• The growing incidence of "lifestyle claims" has led some carriers to develop return-to-work incentive benefits. Built-in features, such as zero-day residual benefits and allowing claimants to collect up to 100 percent of their prior earnings if they work part time, encourage claimants to return to work.
• Selling short-term disability along with long term disability is another claims management approach that allows insurers to look at a claim before it becomes a long-term disability. All of these risk-management techniques focus on keeping employees healthy and productive, promoting higher employee morale and ultimately greater profitability. But today's long term disability products offer employers even more.
A Flexible Approach Long-Term Disability Lawyers Today's LTD products are increasingly flexible, affording greater opportunities for employers to tailor their coverage to fit their needs. A wide range of benefit options are available, including shorter elimination periods, conversion riders and cost-of-living adjustments.
• New funding options provide even greater flexibility. Voluntary plans, in which employees pay for the total cost of benefits (with guaranteed issue and group rates), and supplemental buy-up plans, in which employers provide a basic level of benefits and employees have the option of buying enhanced benefits (again with guaranteed issue and group rates), are two cost-sensitive options.
• Plans combining individual DI with group LTD offer perhaps the ultimate in flexibility. Many of these plans provide basic LTD coverage to all employees, with highly compensated employees receiving a customized layer of disability insurance on top. Because these individual policies are sold in multiples, they often receive a premium discount and somewhat liberalized underwriting.
• No matter what kind of disability income protection plan you design for your clients - whether it's straight LTD or a combination of LTD and individual - the key to getting the most out of today's long term disability products is to clearly identify what your clients want. The wide range of benefits, funding options and product combinations enable you to tailor a plan to each client's needs.
By listening carefully and identifying the needs, you can design a disability plan that delivers just what the client orders.
Most of us feel up to our eyeballs when it comes to insurance. Premium notices from one policy or another are constantly coming due. But the fact is, during our working years the ability to guarantee there will be enough income to fund our retirement portfolios as well as meet normal living expenses is typically guaranteed by an insurance portfolio. So what does a typical insurance portfolio look like?
Basic Elements of Insurance Portfolios:
1. Automobile insurance
If you own a car, most states require that you carry auto insurance providing a wide array of protection in the event of an accident.
2. Families - Life and Health Insurance
Families and particularly breadwinners and spouses have life insurance to provide for the well being and ongoing needs of their loved ones in the event of pre-mature death.
Health insurance provides the coverage needed for health care services in the event of an illness or injury.
3. Home Owners/Renters Insurance
Homeowners similarly carry home owners insurance to protection their property and its content from loss or damage.
4. Disability Insurance - an Essential Need!
Why do people need disability insurance? What role does it play?
Income Protection is another term for disability insurance. Generally it includes both short term disability (STD) for disabilities of up to 6 months, and long term disabilities (LTD) for disabilities exceeding 6 months.
STD and LTD benefits are complimentary. They work together to replace a portion of wage earners' lost income or salary, enabling them to sustain their dignity by providing benefits that replaces the income lost, and maintaining their own and their families' living expenses should a disability or impairment limit or prevent their working on either a temporary, (i.e., short term), long term and possibly permanent basis.
Long Term Disability (LTD) Explained
Statistics show that approximately 40% of the working population under 65 has a long term disability during their lifetime.
For people with long term or permanent disabilities who can no longer work due to a chronic or progressive condition, long term disability benefits replacing lost income has no substitute. These benefits are vital for individuals and families to sustain their established lifestyle and provide a lifeline that enables them to maintain their dignity as well.
Employers usually provide group STD and LTD coverage for employees, but cap the maximum disability benefit regardless of an employee's level of income. Therefore, high income employees, executives, medical and other professionals, including the self-employed need to supplement group benefits and/or purchase individual (LTD) insurance coverage providing adequate coverage to replace lost income, in the event of a long term or permanent disability.