13th Edition
November 2005
A newsletter dedicated to the distributors of disability insurance published by
JHA, the leader in disability reinsurance, consulting and research.
 


The graph below represents the results of over 400 human resource professionals when asked how many lost work days their employees have on an annual basis.  43% of employers with +500 employees “Do Not Know” how many days their employees are absent.

 
Average Number of Unscheduled
Absences by Employee Size
 
  2-99
Employees
100-499
Employees
500+
Employees
< 3 days 14% 8% 3%
3-5 days 34% 32% 19%
6-7 days 14% 16% 17%
8-10 days 7% 9% 12%
> 10 days 4% 4% 5%
Do Not Know 27% 32% 43%
Source: 2005 JHA/EBN Absence Management Survey

 



Paycheck Plus, a new combination worksite product offered by Jefferson Pilot Financial Life Insurance Company, is a well researched attempt at finding the first-time buyer of disability insurance from both an employer and employee perspective.  Paycheck Plus combines STD, LTD, Life and AD&D into one payroll deducted product.  The program was developed for first-time buyers of ancillary benefits in the under 200 employee market.

The plan designs are straightforward.  There is only 1 option for each line of coverage making it easier for employees to understand what they are purchasing.  The choice becomes a simple yes or no, rather than getting bogged down in the details of how much coverage to choose.  The STD benefit is 60% to $250 of weekly income for 13 weeks following a 15 day elimination period.  The LTD benefit is 60% to a $1,000 monthly income maximum for up to 5 years with a 90 day elimination period.  And a $20,000 Term Life and AD&D benefit rounds out the package.  The plan designs cannot be altered; therefore, a first-time buyer is the most likely candidate to purchase this product versus one that is looking to replace voluntary coverage they may already have.

  more...



Most people in the disability industry are aware that UnumProvident entered into a settlement agreement with insurance departments of 48 states in November 2004. California and Montana did not participate in the settlement at that time.  Recently, the company reached an agreement with California.

The California Insurance Commissioner is implementing provisions from the UnumProvident agreement across the disability insurance industry in his state. If he succeeds, the industry will be significantly impacted.

The attached article discusses the settlement and the potential bearing it could have on carriers offering group long-term and short-term disability and individual disability insurance products.

more...



Given the amount of business that is renewed or written with a January 1st effective date, we thought it would be timely to revisit the importance of BME in the sales process.

Basic Monthly Earnings Definition (BME) – There is nothing basic about this provision!

The very name Basic Monthly Earnings makes you think the provision is unimportant and easy to understand. If you are involved in the underwriting or claims management area, you know nothing could be farther from the truth. Ask someone what their BME is and you are likely to get a variety of answers that may or may not include commissions, bonuses, deferred compensation, or other extraordinary income items. Rest assured at claim time, claimants assume that everything should be included.

  more...

   

   
   
   
   
   

Please send email responses, in reference to 4 Corners, to Editor: Mary Beth Carion
Special thanks to contributing editors: Kevin Riley, Perry St Louis and Bill Mariski


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