Portability might be one of the trickiest disability insurance policy features for benefits advisors to market.
Many producers and enrollers who sell individual disability policies at the worksite make a point of mentioning portability.
“Employees are more attuned to the fact that, Hey, I own this,” says Steve Vermette, an Orlando, Fla.-based managing general agent for Colonial Supplemental Insurance. “People are keeping their policies longer than they ever have.”
But experts interviewed say some disability insurers and benefits advisors downplay portability features because of concerns about risk management issues, employer perceptions and cost.
Most individual disability policies sold through the worksite are portable. Many traditional group disability policies also offer portability features, which usually are called “conversion” provisions.
At Prudential Financial Inc., Newark, N.J., about 25% of the group disability policies on the books include conversion provisions, according to Michael Witwer, a senior vice president in Prudentials group insurance unit.
“Theres a higher price for that,” Witwer says. “Its not standard. We havent seen any major increase in activity in this area.”
Pension services companies and group life insurers brag about portability features, and the federal government has written some group health portability requirements into law.