Surveys have shown that many people either plan to delay retirement or aren’t planning on ever retiring. Gallup reported at the end of last year that not only has the expected retirement age increased to 66 from age 60 in the mid-1990s, but 49% of boomers say they’re either going to retire past the age of 66 or just forget about retiring altogether.
While some fear they may not be able to afford to retire, others stay because they love their work. Still others are determined to make a difference. Whatever the reason, the end result is the same—older workers are hanging in there.
If your clients are among them—even if they aren’t continuing to work out of financial necessity—you may have some concerns about whether they are able to obtain disability insurance. Normally coverage terminates at age 65 or at the individual’s retirement age for Social Security eligibility.
That’s no longer necessarily the case, thanks to products such as MassMutual’s MaxElect13 individual disability income policy. Launched in January, the product includes an increased maximum issue age to 80 and decreased rates for workers between ages 65 and 75. It also provides the opportunity for employers to offer coverage to key employees who, under a regular disability policy, might find that not all their income is covered, such as bonuses or commissions.
According to the company, while a few of its competitors—Guardian, Metropolitan and Unum-Provident among them—issue policies to insureds as old as 70, MassMutual is the only company that issues coverage to people up to 80.
Kevin Sheridan, vice president for worksite product management at MassMutual, said that while the new policy works for employees under 65, the new features really play out for the older worker. Sheridan said, “Effectively, under 65, MassMutual does not have the right to cancel unless someone doesn’t pay the premium. After 65, it’s conditionally renewable, [and the condition is] simple—you need to be working and not disabled.”
Not only is coverage available for variable income, employees can increase their coverage as their incomes rise without having to go through a separate application process. “Generally speaking, [we’re] looking at executives: people earning in excess of $75,000 per year,” Sheridan said.