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5 Points To Consider When Assessing Disability Policy Value

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In today’s economic environment, customers are extremely cost conscious when selecting employee benefits.

However, you have to educate your clients about value as well as price, or you’ve only done half of your job as the producer.

Here are some points to consider.

1. Plan differences are not always apparent on the surface.

Too often, a carrier comparison doesn’t dig deep enough into the elements of a disability plan to give your clients the full picture.

For example, two carriers that have a 90-day elimination period might look the same on the surface but are in reality very different. Carrier A might require that the insured is not only unable to work but also is suffering a loss of income in order to begin satisfying the elimination period. Carrier B, on the other hand, might have a more flexible provision that allows the elimination period to be satisfied if the insured is unable to work but still collects a paycheck.

Since many disabilities may impact an employee’s ability to work full time without immediately affecting income, this small difference in policy language can have a big impact when the employee submits a claim.

Embedded features in disability coverage also can be big differentiators. For example, employee assistance programs or work-life balance programs are often available for employees, perhaps eliminating the need for employers to buy this service separately.

Other available features include Social Security advocacy for employees on disability and human resources compliance support. Today’s benefits managers find the latter of growing importance in this increasingly complex regulatory environment, and paying a little extra for compliance support may be a bargain!

The EAP and work-life programs, in particular, are gems worth mining to make the point about value. Here’s why: An employer will experience a limited number of long-term disability claims each year. In contrast, 100% of the employees–and their dependents–can take advantage of the EAP and work-life program.

2. Product versatility is key to meeting customers’ unique needs.

As a benefits advisor, your clients look to you to understand the unique needs of their work force. It is important for you to do a comprehensive needs analysis and seek out corresponding product options.

For example, a small business would probably appreciate a benefit that would allow the firm to continue operating if one of its key employees became disabled and couldn’t work.

A professional services firm, such as a law firm or a group medical practice, needs close attention paid to the definition of basic monthly earnings, which can vary tremendously from carrier to carrier.

A technology company with a high population of young breadwinners with children may find a specific education benefit, which reduces the chance that a disability will interrupt the ability to pay for a child’s education, very desirable.

And a paternalistic, white-collar employer might see significant value in a worksite modification benefit that helps employees with disabilities return to their jobs.

3. Service quality has long-term effects on customer satisfaction and loyalty.

The quality of a disability carrier’s service has long-range implications for your clients. Clients who receive poor service from a carrier you helped them select are typically not satisfied.

Educating your clients on the type of service they can expect from each carrier is a crucial element in the buying process. For example, will your clients be serviced by a dedicated local contact whom they can meet with face to face? Can the carrier custom-tailor a service option that meets your customers’ needs?

4. Not all carriers are equal at claim time.

Differences among carriers are often uncovered at the time of most critical need: when an employee submits a claim. Disability insurance plans are often complex, making claims decisions complex, as well. A low rate doesn’t equate to a good value if the carrier doesn’t have a claims infrastructure and the experience with disability that will support your clients when it matters most.

Be sure to discuss with your customers the investment each carrier has made into their claims process.

Key questions to ask: Does a carrier have a unique depth of experience with disability claims or are disability claims piggybacked onto a different product infrastructure? How many specialists does a carrier employ to manage claims and what is their training? Are there qualified clinical professionals on staff who have the experience to understand the medical and psychological issues involved in disabilities?

5. Employers want to reduce the number of their carrier relationships but expand offerings.

In today’s complex marketplace, employers often appreciate the convenience of one-stop shopping. You can help your clients by ensuring they are aware of all the benefits and services a carrier has to offer.

For example, choosing a carrier that can provide disability, life, long term care, supplemental and worksite options, risk management services and more, combined with a variety of employer/employee pay options, is often more attractive than shopping for product and service individually.

Centralizing coverage with one carrier often ensures better underwriting, prevents overlaps in coverage and leads to more seamless claims management. It also can improve your ability to upsell additional, needed coverage.


Key Questions

Questions to ask about handling of claims:

–Does the insurer have much expertise in evaluating disability claims?

–How are the disability claim managers trained?

–How much does the claims staff know about psychological issues?