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Group Disability Is Not A Commodity

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There are criteria advisors can use to pick out quality carriers

In the group long-term disability insurance market, quality is extremely important.

One of the most important tasks benefits advisors can perform is to help employers understand why having group LTD matters and why automatically choosing the carrier with the lowest rates is a bad idea.

Employees need group LTD because the probability that they will suffer a serious, disabling illness or accidental injury during the next few years is considerably higher than the probability that they will die.

Meanwhile, the median age of the American worker is already 40, and the work force is aging rapidly. Traditionally, older workers have suffered higher disability rates than younger workers.

Most employers find that their work force is their single greatest asset. Employers invest many dollars and other resources on hiring, training and maintaining talent. Providing solid disability coverage and a solid disability management program is one way to protect that investment.

Of course, employees need insurance to protect against the risk of losing their work capacity and earning power.

How can you help illustrate the need of disability insurance to your clients? There are steps you can take to make sure the process is simple and satisfying for both you and your clients.

Here are some ways to do that successfully:

1. Work with a carrier that knows the business.

The key to managing disability comes through partnering with a carrier that provides affordable disability coverage and a comprehensive disability management program.

Disability coverage that only provides income replacement is not enough. The provision of a cost-effective comprehensive return to work and disability management program is the single most important feature to consider beyond the monthly benefit payment. This is especially true for employers with an aging work force.

2. Value quality over cost.

Many brokers would agree that price differentiation between LTD carriers is generally negligible. Therefore, carrier selection based on price alone is simply penny wise and dollar foolish. Instead, carrier selection should be based on the quality and depth of the carrier’s disability management program. During the selection process, it is recommended that employers focus on the following criteria:

==Staff experience level, level of education and professional credentials.

==Approach to disability management.

==Claim team structure and resources.

==Caseload ratios.

==Job accommodation funding practices.

3. Educate clients about the difference in outcomes for purchasers of low-quality and high-quality group LTD.

Employers who provide disability coverage coupled with a supportive disability management plan have the best chance for a positive outcome. Make sure your clients are aware of that. A positive outcome includes return to work, staff retention, cost control and positive morale. In the absence of a top-notch disability management plan, the usual outcome is a permanently disabled employee, spiraling costs and lower morale.

4. Ask your clients this question, “Would you rather have money to live, or money to die?”

In reality, group long-term disability insurance is a benefit no one can afford to be without.

Michael L. Newman, M.S., CVE, LPC, LMHP, and diplomat, American Board of Vocational Experts, is the manager of group long-term disability rehabilitation at Mutual of Omaha Insurance Company, Omaha, Neb. He can be reached at [email protected].


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