Discussion in 'Disability Insurance Forum' started by L5tc, Mar 12, 2016.
Just so I'm clear, the lump sum is payable to the business or the employee?
Whomever the monthly benefits are assigned to but remember that it is not paid out till the policy expiration date. I always recommend the employer go to Principal outside of NY or Lloyds inside of NY for a true key person plan and this will not disrupt the employees ability to obtain personal coverage for themselves.
I came around to the Lloyds Peterson policy. It's a clean plan doesn't affect the insureds ability to get their own policy. In this case it would pay 400k after a year wait. The insureds insurability is set in 5 year increments with very loose wording as to what happens after that.
Most exec level DI that I do is BOE and not key man.... however... I have never heard of this.
Guardians individual UW Guidelines say that issue limits are based on "disability benefits available to the applicant".
The application asks if "you have any disability insurance inforce or applied for".
The Business is the Owner and Applicant of a Key Man policy. Not the Insured/Employee. The Employee does not apply and has nothing inforce for a Key Man policy. It is the Business that has applied and has coverage inforce.
I dont see how or why Individual coverage would be reduced for a benefit that you are not the Owner of or the Beneficiary of. And according to Guardians app and UW guide, it does not appear that they would. Also, why would they do this for DI and not for Life? Key Man Life does not count as a personal policy of the Key Man when calculating maximum issue limits.
I am scheduled to speak to my regional DI rep for Guardian on Monday, so I will ask about this.
If you can give some references and further explanation (or personal examples) for your position Id be interested to hear.
Most of what they do (or at least what I've seen from them) is Guaranteed Renewable or Conditionally Renewable. Either way the price could go up after year 5.
Keep in mind that policy language is specific to Petersen. You could go through a different US based CoverHolder and the language could be stronger or weaker.
Crump Special markets is another to look at if you want to write Lloyds. It will still be underwritten by Lloyds, but the policy language will be specific to Crump and different (slightly) from the Petersen policy. It would at least serve as a comparison.
But I would double check on the issue I am discussing in the post above this one first before going with a GR policy over Non-Can.
What does BEO mean?
That was supposed to say BOE, my fingers were typing a bit too fast I guess... lol.
BOE is business overhead expense.
A Key Person policy will not count towards inforce individual coverage. However, if an individual policy is being used as a Key Person plan, that will be counted towards inforce. My guess is that this is the case the bene could be changed after the policy is issued and the insured could over insure themselves.
scagnt83, Did you ever talk to your Guardian rep about this? I'm curious to see what they said.
Did you check out Principal? They are the only one's that I know of that specifically have that policy.
It is not available in NY.
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