Group LTD
- Thread starter nboeschen
- Start date
Do the CPAs or owners want to be part of the plan, or are they also looking at individual coverage?
Own occ for CPAs is usefull. Not having it essentially means that if you can make 60% of your current income doing anything else you're not likely to get a check from the insurance company.
There are group carriers that will do own occ for a least a couple of years.
Own occ for CPAs is usefull. Not having it essentially means that if you can make 60% of your current income doing anything else you're not likely to get a check from the insurance company.
There are group carriers that will do own occ for a least a couple of years.
- 15,041
Ditto what BNTRS said. The CPAs will be much happier with own occ coverage, and really individual coverage. Many quality individual carriers will issue this on a multi-life basis with reduced underwriting and a discount. Also, as small as that group is, you may have a hard time finding a group carrier to take it.
Additionally, try to get the staff to pay for their own coverage. The employer can bonus them the premium paid and get better tax treatment.
Additionally, try to get the staff to pay for their own coverage. The employer can bonus them the premium paid and get better tax treatment.
- 1,459
Not really, there a more than enough carriers to choose from. A few coming to mind:
Hartford
Principal
Reliance Standard
Fort Dearborn
Many group LTD plans have a two year "own occ" provision as well as residual benefits, after two years, then the definition of a disability gets more restrictive. As others have said, individual coverage for the CPAs may be a good fit or at a minimum, an overlay of an individual policy on top of the group plan. Use the group chasis for everyone else, but offer the overlay option as a voluntary benefit. You could position it as a multi-life discount for the owners if they offer the option.
- 15,041
They will take a 4 person group? What is the required participation rate?
- 1,459
Yes. I have written cases with each of those carriers, and I have a fair amount of groups in the 3 to 5 employee range. The above poster said it was going to be employer paid, which means 100% participation of eligible employees. Some carriers will require two lines, but adding a $10,000 group life benefit costs peanuts.
Hartford - I believe it's 5 for guaranteed issue, can't remember if they take fewer employees for non-guaranteed issue. They've been very competitive for me lately.
Reliance Standard - guaranteed issue with 2 or more employees. I just wrote a small $50,000 group life plan with only three employees, all three were extremely unhealthy and immediate family! (good option to keep in your back pocket)
Principal - I believe it's a minimum of 3 employees (may be two), but not guaranteed issue unless there are at least 10 employees (I'm guessing a little here).
Companion Life - guaranteed issue starts at 3 employees.
The Standard - 2 or more employees, don't know what the GI rules are
Fort Dearborn - it's been a while, I can't remember their rules, but I do know they take on small groups.
Hartford - I believe it's 5 for guaranteed issue, can't remember if they take fewer employees for non-guaranteed issue. They've been very competitive for me lately.
Reliance Standard - guaranteed issue with 2 or more employees. I just wrote a small $50,000 group life plan with only three employees, all three were extremely unhealthy and immediate family! (good option to keep in your back pocket)
Principal - I believe it's a minimum of 3 employees (may be two), but not guaranteed issue unless there are at least 10 employees (I'm guessing a little here).
Companion Life - guaranteed issue starts at 3 employees.
The Standard - 2 or more employees, don't know what the GI rules are
Fort Dearborn - it's been a while, I can't remember their rules, but I do know they take on small groups.
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- 15,041
Good to know. Although, depending on how strict the underwriting is on the group policy, you might as well go individual.
- Thread starter
- #9
The owners wanted to be part of the group plan nut I'm thinking they will be better off with personal coverage and then offer the group to the other 2 employees.
If they owners enter into the group plan, can they increase their coverage as their income increases? I'm guessing a COLA or Future Purchase Option could be included?
If they owners enter into the group plan, can they increase their coverage as their income increases? I'm guessing a COLA or Future Purchase Option could be included?
Usually your group LTD coverage is going to provide a percentage of income up to a maxmimum, so for example:
Covers 60% of gross income (base salary usually) to a maximum of $5,000 per month.
You can get higher amounts, and that won't likely be too hard in this case.
On the individual side, yes they could increase coverage with an increase in salary this is goes by several different names depending on the carrier but the rider is a guaranteed increase option (however the company wants to word it).
Also, a lot of individual products have automatic increase options that are exercised every year or can be exercised every year, usually something in the range of a 5% increase for the first several years.
Covers 60% of gross income (base salary usually) to a maximum of $5,000 per month.
You can get higher amounts, and that won't likely be too hard in this case.
On the individual side, yes they could increase coverage with an increase in salary this is goes by several different names depending on the carrier but the rider is a guaranteed increase option (however the company wants to word it).
Also, a lot of individual products have automatic increase options that are exercised every year or can be exercised every year, usually something in the range of a 5% increase for the first several years.
