A decade ago we made a prediction!
The probability of a disability occurring is one thing. On the other hand once disabled the chance of it being a prolonged disability is also surprising.
You need to do it now, before the deals are gone! The disability insurance industry is retrenching! Two decades of aggressive marketing, liberal plan designs, loose underwriting & claim adjudication of the white collar market left the industry exposed to the potential for adverse claim experience. Then the inevitable happened. A North American middle management meltdown; followed by the economic downturn, created more than the usual mental and stress related claims. Relation to earnings clauses had been severely liberalized. Malingering anti selection ran rampant. This combination of events caused claims experience to rise well above assumed levels. As a result, for the past year the North American market has been making significant adjustments.
How?
Rates are going up! Benefit features are much more conservative. With professional plans where rates cannot be changed, insurers must recoup losses through rate increases of new plan holders.
* Doctors reclassed to 3A in the U.S.!
* Dentist to 3A in Canada.!
* Own occupation definitions eliminated from Doctors in selected states.
* Sex discriminant rates and rates by territory are introduced.
Some companies are rethinking their presence in the non-cancellable guaranteed renewable plan market.
So How does this effect me?
We strongly urge those that need to buy or "top-up" their disability programs, do so NOW and with dispatch, to avoid disappointment!
So, What happened. The market shrunk. Only a fewer insurance compnies now offered individual, portable long term disability insurance. The rates went up. Occupational classifications were modified. Here to fore benefits wereseverely curtailed. I wonder what the pandamic will do to the morbidity rate and the resulting responce of the LTD industry?
Professionals
We have products and carriers for the white collar professionals, like doctors lawyers, dentists etc. We can demonstrate the significant limitation of association plans for these professions.
Overhead Expense
Professions that run a practice almost always run high overhead expenses in maintaining the effectiveness of such practice. In the event of a disability income stops but most bills don't. Overhead expense protection creates the cash flow to cover those expenses.
Business Owner
Business owners often provide group disability for their employees. Often in this situation because of the average employee salary is significantly below the owner's income. Group plans are often capped at a fixed maximum. this usually underinsures the owner executive. Other limitations of group plans make it necessary for the owner executive to look at additional or alternative coverage for himself.
Disability Buy-Out
Shareholder - partners recognize the need for buy - sell agreements. many also recognize that funding the agreement against the unexpected contingency of death is best accomplished by life insurance. Many however do not realize the financially burdensome contingency of a non active partner down indefinitely through a long term disability. Not only are they non contributory to the profitable operation of the business they are often a hindrance and financial drain. A well constructed buy sell agreement covers off this contingency and can be funded in whole or in part by "disability buy out" protection providing lump sum or systematic funding of the buy out agreement.
Home Based Business
We have plans that provide protection in difficult occupations like home based businesses.
Uninsurable Risks
We have access to insurance markets for uninsurable risks.
Unemployed
We can provide continuation of disability income protection of displaced employees previously covered by group plans of former employers. A great transitional protection program. ~
Here is an excellent video explaining the fundamentals of Long Term Disability Insurance for a lawyer specializing in this area.