Several of our clients have implemented executive disability plans – employer-paid individual policies designed to supplement the group LTD plan for a select group of management employees. A recent disability claim highlighted the importance of the “small print” in a disability insurance policy.
In this case, the employee was diagnosed with leukemia. We submitted claims to both the group and individual disability carriers, and both paid. However, the individual policy paid a lump sum of $10,020 in addition to the monthly benefit of $1670. In this case, the insurer was Principal.
The employer called me to ask why his employee received the $10,020. With Principal’s contract, a supplemental health benefit is generally included at no additional cost. It pays a lump sum of six times the monthly face amount in one of three scenarios:
- Coronary artery bypass graft surgery
Since the employee was diagnosed with cancer, Principal paid the supplemental health benefit in addition to the regular monthly benefit.
There’s a common perception that the details or small print in an insurance contract are generally unfavorable to the policyowner. However, with several disability insurance contracts, that small print, which is often overlooked, can be a really good thing.
If you’d like to chat about this topic or others related to employee benefits, feel free to give us a call at (866) 724-0008 or click the button below.