If You Couldn’t Work, How Long Would Your Savings Last?
Securing quality disability insurance is a critical component of any sound financial plan. TBG West has extensive experience in enrolling plans of mandatory as well as voluntary participation, including individual disability, group short-term disability, group long-term disability, and Lloyd’s of London excess disability.
Coverage Profiles: Erika J.’s story
Erika J., new law firm Partner, age 36
“Successfully managing risk is the most important aspect of what I do every day working with clients in my law practice. Given all that I’ve invested into my skills, it made sense to take steps to protect my income in case of a disability. Buying an individual disability insurance policy helped take away any anxiety about an illness or accident derailing my future plans. With my finances protected, I can better focus on what’s really important in my life.”
Group Short Term Disability (STD)
If you choose to be self-insured, you need to decide whether to engage an insurance carrier to professionally adjudicate your claims, including obtaining appropriate and sufficient medical evidence to support each claim and its duration. Administratively reviewing claims is commonly referred to as an Advice to Pay service.
Because few clients have the resources or medical expertise to professionally self-administer their STD benefit programs, we can help employer groups design and implement fully-insured STD plans with their chosen insurance carrier. At time of implementation or if problems arise, TBG West sponsors weekly conference calls with our client and the carrier to develop mutual expectations and open lines of communication. Fully insured and advice to pay plans routinely smooth the transition from STD to LTD benefits.
Group Long Term Disability (LTD)
Contracts of disability insurance and their provisions vary widely and every word of the contract affects whether and how benefits will be payable at the time of disability. Attention to the details of the contract of coverage is one way in which TBG West sets itself apart from other brokers.
TBG West optimizes coverage for highly compensated individuals and in fact has negotiated custom contracts to our specifications with several major insurers. Under no circumstances do we permit carrier-produced benefit loopholes sometimes referred to by carriers as “cost containment” provisions, without the full advance knowledge of our clients.
Individual Disability
Unlike Group LTD, individual disability insurance is not experience-rated, meaning that the number of claims has no impact on the pricing available to the employer group at large. IDI thus becomes an excellent risk management solution for cost stability, added to which Individual insurance may be combined with Group insurance to achieve much higher combined limits to achieve the levels of coverage needed.
Over the past decade during continued growth in average partner compensation the major driving force in changes to coverage has been to increase partnership benefit limits from $15,000 to $20,000 and now to $35,000 to $50,000 per month in benefit. The overwhelming response by the vast majority of AmLaw 200 firms has been to blend a combination of Group and Individual disability insurance to meet their objectives.
Lloyd’s of London Surplus Disability
Beyond the benefit levels which can be garnered in the U.S. domestic disability insurance market is Lloyd’s excess disability coverage. Once thought of as an exotic product only insuring unusual risks in the entertainment and athletic fields, today’s high-limit excess disability insurance provided by Lloyd’s can be an excellent risk management solution for high-earning professionals, with benefits in the hundreds of thousands of dollars per month. Like Group LTD and Individual Disability Insurance, all Lloyd’s contracts are not created equal, and can frequently contain serious defects which affect whether a claim can be payable. TBG West has designed a custom Lloyd’s contract for our law firm clients which remove these loopholes and contain benefit provisions mirroring the underlying group and individual disability plans.
Coverage Profiles: Matteo C.’s story
Matteo C., Consultant, age 50
“A lot of people depend on me at my consulting firm – and at home, too. When I was diagnosed with cancer at age 49, I felt like everything stopped. My stress level was through the roof and I felt like I had no control of my life anymore. I was going to treatments, and I couldn’t concentrate on the bills that were piling up. I knew I had disability insurance, and it really helped. My plan was able to keep me afloat financially. I realize now that for someone like me who’s in charge of a lot of things, peace of mind was paramount. I think the relief of some of that financial burden was letting me focus on what was important. I was able to spend time with family and that gave me enough stability to fight through what I was going through. Eventually I recovered enough that I was able to get back to work and pick up where I’d left off.”
Fast Facts: Disability Insurance
For a plan which provides tax-free benefits at time of claim, 60% income replacement usually results in an insured receiving approximately 100% of their prior rate of pay after-tax. However, if the employer chooses to structure the underlying group disability plan as a taxable benefit, flexible buy up options can still allow for some proportion of the employee’s supplemental group and/or individual benefits to be tax-free.
The terms and conditions of the insurance policy are all-important. Insuring the ability to perform the material and substantial duties of the insured’s occupation (including recognized professional specialties) are goals of a well-designed contract.
Premiums typically depend on underwriting risk factors, including your industry, occupation, age, pre-existing health conditions, and gender.
For individual coverage, coverage is portable as long as the insured continues their payment of premiums. At the employer’s option, group long term disability coverage can also include conversion options.
Continue a Conversation
Is your broker doing everything possible to optimize your firm’s disability coverage? Let’s talk today with your firm’s benefits team about your goals and how TBG West can improve outcomes.