Archive for November, 2009

Disability Insurance for Women Medical Residents by Jamie K. Fleischner, CLU, ChFC, President of Set for Life Insurance.

Women are three times more likely to be disabled on the job.  Therefore, their disability insurance rates are also three times more expensive.

However, there are several things women can do to save on their disability insurance. The most important thing they can do is to consider finding a policy that offers unisex rates.  Since female rates are 40% more expensive, this immediately reduces their rates by 30-40%.

How do medical residents find unisex rates? At Set for Life, we work with residency programs throughout the country to set up these steeply discounted rates. Please contact our office first to see if these rates are already in place in your program. (more…)

An interesting problem develops when a termination of an employee involves a severance package and part of that package is the requirement to continue certain employee benefits such as their Long Term Disability Insurance. The human resource departments often times get these calls and panic when they realize they cannot perform as promised since they can no longer keep the terminated employee on the group LTD plan. Securing an individual plan is not available option since the person is currently unemployed.

From the firm’s perspective: This situation has now placed the firm at risk for a significant liability should the terminated employee become disabled. The firm would have to fund the disability benefits themselves and this could be into the hundreds of thousands or even millions of dollars. The firm would have to book this liability as if the benefit will be fully payable.

From the terminated employees perspective: While an individual is between jobs, the need for disability insurance continues to be very important. This may sound contrary to logical thinking, but consider the consequences of having a disability during unemployment. How will they continue to run their household, pay the mortgage, medical bills, etc?

To make matters worse, the disabled worker most likely now has a pre-existing medical condition which would preclude them from being able to purchase an individual policy.  The medical condition or physical limitation could also cause potential employers to deny employment leaving the individual with few options. 

 The solution is a severance disability policy to help cover this risk.

The financial impact on individuals who become disabled can be staggering if they lack disability insurance-as high as 20 times a person’s annual salary, finds a new study released by the nonprofit LIFE Foundation and America’s Health Insurance Plans (AHIP). Conducted by the global consulting firm Milliman, Inc., the study, titled “The Impact of Disability”, is a rare look at the consequences facing individuals who become disabled and can’t work, and the level to which various types of disability income protection can help to reduce the financial impact. The findings reveal that in the absence of insurance, a majority of Americans would likely have to make difficult financial decisions, or even drastic lifestyle changes, in order to cover the costs associated with disability, regardless of whether the disability is short- or long-term. (more…)