A Combination Group + Individual Disability Claim Case Study

There are several good reasons to combine group long term disability (LTD) insurance with supplemental individual disability insurance (IDI) plans:

  • Group LTD plans don’t always provide enough income replacement.
  • Group LTD plans don’t always cover bonuses, commissions, or other types of compensation.
  • Employer paid group LTD plans are taxable unless the premium is “grossed up” into employee payrolls.

We have several clients that have adopted IDI plans, both employer-paid and voluntary.  For this case study, the IDI was made available to the employees on a voluntary basis, and at their own expense.

The employee population was about 200 people, and about 90 took an IDI policy.  One of those policyholders, Mary (not her real name) got sick and was not able to return to work.  Her income was critically important to keeping her household afloat financially.

MassMutual was the IDI company, and the group LTD was with another company.  Mary filed a claim simultaneously with both companies, and MassMutual approved the claim quickly.  The group carrier, however, denied the claim initially, citing insufficient medical information to support the disability.

We got in touch with the LTD claims examiner and explained that MassMutual had already approved the claim, and the initial definition of disability with both contracts (at least initially) was nearly identical.

They appreciated the fact that another company was seeing things differently, but they still needed more information.  Mary, frustrated with the process and focusing on her own health, asked if we could help. I offered to send one of our employees to her doctor with her with a list outlining exactly what the LTD claims person was looking for.  Mary signed a HIPPA authorization, and the meeting with the doctor took place.  Together they left the office with all of the necessary records, and the group LTD carrier paid the claim shortly thereafter.

In this case, the IDI policy served several important purposes:

  1. It gave Mary some cash flow quickly.
  2. The claims approval helped to convince the LTD carrier that the claim was legitimate.
  3. Once the LTD carrier paid, it provided the supplemental income that Mary needed.

If you’d like to talk about how IDI plans can enhance your benefits package, we’d be happy to discuss it with you.  Give us a call at (866) 724-0008 or click the link below.


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