Missed Group Health Opportunity w/Current Client

[benworthen]

Group Disability works well for Small businesses that need guaranteed issue policies to protect against income loss for otherwise uninsurable people. It is a very valuable product in the right situation.

In fact many guaranteed issue policies pay on top of individual policies, with no coordination of benefits. Why an agent would make a blanket statement about the near uselessness of a product amazes me, when as a firm we have done 250k+ in commission on GI GD sales in the last 2 years, without even trying.

We are an accounting firm specializing in Strategic tax and estate planning and capture the ancillary business we see that needs improvement for our clients.

We even had a situation recently where a very wealthy doctor, who was uninsurable on a Business overhead Expense policy, paid for a portion of his costs with a Group policy. Guess it wasn't as useless as previously noted, pretty cheap coverage also.

Would I use it as a door opener if I was still cold calling? Probably not, but I wouldn't disregard it like some of the agents on this forum.

 

[Tri-State]

Group DI is a disservice to the insured unless it is a voluntary plan and even those are usually lousy contracts. A better choice is individual DI for the tax advantage.

A buddy of mine specializes in replacing group DI with individual policies. Does quite well.

I had to register to respond to this, as it is highly inaccurate. In the interest of full disclosure, I am a carrier rep and we sell group disability.

Voluntary disability plans are going to have significantly higher rates than a group plan, and while some carriers have weaker contracts for their vol. offerings, other carriers offer nearly identical contracts on the true group and voluntary products.

The tax advantage is a moot point, as employer-paid plans can be "grossed-up" so as to protect the benefit payments from being taxed. The employers pay income taxes on the premium paid on their behalf, and receive their benefits tax free should they become disabled.

If an employer has their group life and disability contracts with the same carrier, it is highly probable that the waiver of premium for the life insurance will begin upon the completion of the elimination period for the disability. This means that the waiver of premium can begin sooner in most cases (typical 3 month EP vs. 6 month wait for WOP).

There are lots of advantages to a group contract, and not offsetting those personal plans is a big one as well.