"Paycheck insurance" (aka Disability Income insurance) replaces a chunk of one's paycheck if it's impacted by illness or injury. It's one of the two most complicated products we offer (the other being LTCi). Offered in both individual and group "flavors," it's pretty customizable.
MassMutual is one of the few top-shelf DI carriers still slugging away in the individual market, mostly to white- (and some grey-) collar professions. Recently, they sent out a chart identifying "policy design trends" which I found interesting. Here's a sample:
■ Over 80% of these plans are issued with a 90 day waiting period. That is, one must be disabled for three months before the checks start rolling in. This has long been the "sweet spot;" by contrast, less than 15% were issued with a 6 month wait.
■ Nearly two thirds of MM's insureds chose the "To Age 65" benefit period. This means that, once they've satisfied the waiting period, benefits would be payable to "traditional" retirement age (as long as one is still disabled, of course). About a fifth of their clients opted for an additional two year extension (to age 67).
■ Almost 80% of their policies included the "extended partial disability" rider. Also commonly referred to as "residual," this benefit looks to see if one's wallet remains disabled even if one's body has healed.
■ About half also chose a "catastrophic" benefit rider, which mimics Long Term Care insurance thresholds (eg "activities of daily living") to determine benefit eligibility.
■ I was surprised that only about half of their clients added a Cost of Living Rider, which can help as a hedge against inflation. This is most likely a result of the sluggish economy over the past few years.
It's estimated that two-thirds of folks in the private sector lack long term disability insurance. Are you one of them?
[Hat Tip: MassMutual's Harold K]
MassMutual is one of the few top-shelf DI carriers still slugging away in the individual market, mostly to white- (and some grey-) collar professions. Recently, they sent out a chart identifying "policy design trends" which I found interesting. Here's a sample:
■ Over 80% of these plans are issued with a 90 day waiting period. That is, one must be disabled for three months before the checks start rolling in. This has long been the "sweet spot;" by contrast, less than 15% were issued with a 6 month wait.
■ Nearly two thirds of MM's insureds chose the "To Age 65" benefit period. This means that, once they've satisfied the waiting period, benefits would be payable to "traditional" retirement age (as long as one is still disabled, of course). About a fifth of their clients opted for an additional two year extension (to age 67).
■ Almost 80% of their policies included the "extended partial disability" rider. Also commonly referred to as "residual," this benefit looks to see if one's wallet remains disabled even if one's body has healed.
■ About half also chose a "catastrophic" benefit rider, which mimics Long Term Care insurance thresholds (eg "activities of daily living") to determine benefit eligibility.
■ I was surprised that only about half of their clients added a Cost of Living Rider, which can help as a hedge against inflation. This is most likely a result of the sluggish economy over the past few years.
It's estimated that two-thirds of folks in the private sector lack long term disability insurance. Are you one of them?
[Hat Tip: MassMutual's Harold K]
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