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My bad...Missed the word "Group".
My bad...Missed the word "Group".
I've used MetLife, Hartford, Principal Financial a lot. Used to be that Unum was a leader, and Provident, but they're mostly individual now.
GROUP disability premiums are drastically lower than individual disability premiums, but if you want power over your own policy, get individual. Sometimes business owners buy the individual one first, and then get the group one along with the rest of their employees. If you get group first, the individual one will lower the amount you can apply for, so always get the individual one first.
In my opinion, the most important clauses are the definition of disability and the duration as one of the prior posters said. Why pay for DI insurance to pay out for 5 or 10 years. Have it pay to SSNRA (Social Security Normal Retirement Age), even if you have to lengthen the elimination period in order to meet budget. If you were ever totally disabled, you'd be glad you have a check coming in longer than just 5 or 10 years!
GROUP DI is surprisingly inexpensive, and I can't understand why more businesses don't buy it. I tell small business owners it serves the employee and serves the owners. Many small businesses are family owned and/or staffed by close friends. If an employee is disabled, and there's no disability insurance, often the business owner extends the paycheck or hands out loans, because the employee is a friend or family. Disability insurance releases the owner from that burden, and also benefits the employee.
GROUP disability premiums are drastically lower than individual disability premiums, but if you want power over your own policy, get individual. Sometimes business owners buy the individual one first, and then get the group one along with the rest of their employees. If you get group first, the individual one will lower the amount you can apply for, so always get the individual one first.
In my opinion, the most important clauses are the definition of disability and the duration as one of the prior posters said. Why pay for DI insurance to pay out for 5 or 10 years. Have it pay to SSNRA (Social Security Normal Retirement Age), even if you have to lengthen the elimination period in order to meet budget. If you were ever totally disabled, you'd be glad you have a check coming in longer than just 5 or 10 years!
GROUP DI is surprisingly inexpensive, and I can't understand why more businesses don't buy it. I tell small business owners it serves the employee and serves the owners. Many small businesses are family owned and/or staffed by close friends. If an employee is disabled, and there's no disability insurance, often the business owner extends the paycheck or hands out loans, because the employee is a friend or family. Disability insurance releases the owner from that burden, and also benefits the employee.
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That also creates a huge liability, both in the form of taxes and lawsuits.
There was a case years ago involving Carvel Ice Cream and an ad hoc disability case. As I recall, someone (possibly one of the owners) was disabled and the company opted to continue his salary. the IRS disallowed the deduction and was upheld in a court decision.
CORRECTION.
It was Chism Ice Cream, not Carvel.
http://amiablebusinessconcepts.com/AdHocPayments.aspx
CORRECTION.
It was Chism Ice Cream, not Carvel.
http://amiablebusinessconcepts.com/AdHocPayments.aspx
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Great point Ann!
You make a valid selling point. What I have run into on the small group side is the owner is struggling to keep up with the health premiums.
I have been pushing voluntary disability this year with no success.
You make a valid selling point. What I have run into on the small group side is the owner is struggling to keep up with the health premiums.
I have been pushing voluntary disability this year with no success.
You're right. I have a case going on right now, where the group client has medical, life, dental, std & ltd in place. An employee is disabled with cancer and gets 66% of salary from the disability insurance (taxable, because the Employer paid the premium). With the money she gets, she can't afford HIPAA premiums to continue her health insurance (the employer doesn't have 20 FTE's to qualify as COBRA eligible). So, she gets a DI check, but can't pay premiums for HIPAA portability medical insurance, and because the DI check is just above the qualification level for AZ's medicare program (called AHCCCS), then she can't get medicaid either. The employer feels an obligation to keep paying her, but can't because then she wouldn't qualify for the disability insurance. He feels an obligation to pay the group health premium, but can't because she's not working full-time. Talk about a prison cell!
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That is more of a moral/ethical issue. I'm referring to flat out lawsuits and tax issues like Bob posted. Ad hoc payments can get you into deep water if you don't have a qualified sick pay plan. Although, the employer would fall into that trap if he went back to paying her. The other problem of paying someone without a proper plan is that an other employee can sue you for discrimination if you fail to pay them.
