Critical contract conversations

December 10, 2020 | By Jim McGovern – BenefitsPro

Are you overlooking these six disability-coverage priorities?

Traditional disability income insurance is one of the best ways your clients can provide paycheck protection. For a benefit that makes up about 1 percent of an employer’s total compensation expenses, according to the U.S. Bureau of Labor Statistics, it’s a significant driver of a business’ employee recruitment and retention.

For employees, voluntary disability insurance pays for itself in peace of mind. By partially replacing income in the event of an injury or illness that prevents them from working, employees can rest easy knowing they can take care of their financial obligations and their family.

When it’s time to put together the policy provisions within either a traditional or voluntary insurance contract, little things that mean the most to the employees can easily get overlooked. More often than not, the critical areas of a disability contract aren’t prioritized during review, including questions about the elimination period(s), benefits amount received if disabled, or who is eligible for the benefit.

These are important concerns. In my experience, there are six complex and easily misunderstood considerations that insurance brokers and their clients need to review with a critical eye. By giving these six areas special attention, you can prevent surprises when a claim is made.

The preX part of the equation

While most employees who opt into disability coverage will be added to the plan, not everyone is going to be eligible. That’s why pre-existing conditions (PreX) must be part of the contract conversation, for the sake of fairness to employer and employee alike.

PreX is the exclusion of a condition that ultimately results in disability in a period of time just prior to becoming eligible for coverage.

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