BY THE NUMBERS
product if they were shown how it could
of brokers are increasing their focus on selling ancillary
benefits, such as disability insurance, in anticipation of
health care reform’s effect on their businesses.
Building the right plan
Voluntary ancillary benefits may be the
solution. These products, now an important
part of a broker’s portfolio, allow employers
the ability to offer valuable benefits while
providing employees the opportunity to
take advantage of group rates on coverage.
These rates are typically less expensive than
purchasing an individual policy.
Offering clients voluntary disability
choices addresses a perceived stumbling
block to selling disability insurance —
price. Many voluntary disability policies
have the same benefits as an employer-paid
plan and offer employees a choice on how
much of their income they want to insure,
up to a predetermined cap.
Like employer-paid disability products,
however, not all policies are created equal.
There are certain features to review to
make sure you are presenting a valuable,
quality product to your clients.
•Definition of disability: There are
varying ways that policies define being disabled. Some of them focus on
the actual sickness or injury; others
look at occupation type or earning potential. There are “and/or” disability
definitions. An “and” definition means
a claimant has to have both functional
loss and financial loss, while an “or”
definition requires only one. Plans
also vary according to occupation.
Some policies will consider a claimant disabled if he or she is unable to
work in any gainful occupation, while
some will define disability as being
unable to perform the material duties
of the claimant’s regular occupation
• Plan duration: Some policies will offer flexible plan duration. The average
long-term disability keeps an employee
out of work for 2½ years, according to
the CDA, so it is important to have a
long-term coverage option that will offer maximum benefits.
• Rehabilitation: Most policies will
have provisions that help employees
with transitional work, job accommodations and rehabilitation, with the goal
of returning individuals to a productive
lifestyle. While this is important for insurance carriers, rehabilitation is also
important on a personal level. Look
for policies that have a robust return-to-work program with rehabilitation
Some employers already offer comprehensive disability plans, including short-term and long-term disability and paid
time off. What many of them may not realize is that the policies and benefits they
have in place may overlap or, conversely,
have a gap that leaves employees without
coverage and benefits for some period.
They could be needlessly spending money,
for example, if their short-term disability
policy kicks in before an employee runs
out of paid medical leave.
In other instances, short-term and long-term disability policies may overlap for
several weeks or even months. A total
income protection assessment can help
clients uncover potential cost savings and
help them integrate short-term and long-term disability, sick leave and salary continuation plans so employees aren’t over-or under-insured.
While there may be some confusion
Source: 2010 Assurant Employee Benefits broker survey
about the need for disability insurance
policies, it is clear that this coverage is
not just for those who wear hard hats. It
is important that brokers educate their clients on disability insurance as a necessity.
Disability Insurance Awareness Month
provides an opportune time to raise this
topic. Clients may not be as averse to hearing brokers talk about disability insurance
as they may think. According to the 2002
ACLI survey, 85% of small employers
would prefer to have a broker talk to them
about disability insurance options rather
than speak to an insurance company or
find the information online.
Sheryle Ohme is senior vice
president of claims operations at
Assurant Employee Benefits.
Assurant Employee Benefits is the
brand name for insurance products underwritten
by Union Security Insurance Company and for
prepaid dental products provided by affiliated
prepaid dental companies. In New York, insurance
products are underwritten by and prepaid dental
products are provided by Union Security Life
Insurance Company of New York, which is licensed
in New York and has its principal place of business
in Syracuse, N.Y. Plans contain limitations,
exclusions, restrictions and reductions. Contact
Assurant Employee Benefits for costs and