Individual Disability Insurance (IDI)
Get up to 100% income replacement by supplementing group coverage with Individual Disability Income (IDI) insurance.
For groups and individuals.
Is Group LTD Enough?
You may need 100% income replacement for:
Health insurance premiums (COBRA or individual)
Staying on track for retirement
Income stability when you return to work, in case you don't perform as well.
Do you want to be dependent on your employer for the protection of your largest asset?
An individual policy is important because disability goes hand in hand with job instability, and most people do not return to work for their original employer.
Social Security Administration; Industry, Occupation, and Disability Insurance Beneficiary Work Return; Social Security Bulletin; Vol. 62, No. 1; 1999; p19. 75% returned to work for an employer other than the one they were with at the start of disability.
Return to Work Income Security
Whether you perform like your old self when you return to work is the key to your income security. In most cases, a return to work is possible. But it's the earnings that matter.
Even if you continue to be medically restricted, Group LTD isn't much help after the return to work incentive period has passed (usually one (1) year). After that, earnings and benefits are typically limited to 60% combined. Keep in mind that Group LTD is optimized for return to work, not individual income protection.
Additional Income Replacement
IDI pays a fixed dollar monthly indemnity amount, separately from group LTD. Neither program offsets for the other, making a higher total income replacement ratio possible.
80% - 90% income replacement is fairly standard on a tax-equivalent basis, with 100% being possible after factoring in retirement protection, earnings on the side (policy permitting), and partial disability benefits. Some features require a rider, for additional cost.
Supplemental Individual Disability Income (IDI) coverage is generally Guaranteed Renewable and often Non-Cancellable to age 65 or older - meaning the insurer cannot cancel or increase the premium until that time, provided the premium is paid.
If the employee loses group LTD, IDI is designed to remain in-force provided the individual continues to pay the premium on a direct bill basis. The individual continues to benefit from the discounted premium for the life of the policy, regardless of employment.
Standalone supplemental IDI, without employer involvement, is also available.
Flexible Approaches For Groups
EMPLOYEE OR EMPLOYER PAID
Premiums can come from any source, in any combination. You can even change cost-sharing formulas over time without repricing existing policies.
LOW PARTICIPATION REQUIREMENTS
Only three (3) policies are required to start, and if participation later falls below this, existing policyholders won't be adversely affected.
Employees can custom-configure their own policies, including the Elimination Period, Benefit Period, Benefit Amount and Riders, subject to underwriting constraints.
If the program needs to be cancelled or funding reduced, nobody gets hurt. Policyholders have the right to continue coverage on the same terms with no ongoing employer dependencies.
No earnings reporting
IDI is issued as a fixed dollar monthly indemnity benefit. If you don't report earnings, the issue amount stays where it is.
employee self service
Employees can on-board themselves. Just give them the link.
payroll deduction not required
Payroll deduction is completely optional. Direct billing lightens the employer's load and still offers significant discounts - especially for women - potentially saving thousands.
It is possible - though not common - to have a non-ERISA program without any employer involvement, and still open up access to significant discounts.
Sample Text for New Hire Kit
Individual Disability Insurance (IDI)
Consider, what is your largest asset?
This is income protection for stable, educated professionals
Individual policy - belongs to you, fully portable
Elimination Period: 90 days – this is not short term disability
Benefit Period options: [2, 5, 10 years; to age 65, 67 or 70]
Carrier cannot cancel or raise the premium until age 65
Employee paid – choose direct billing or payroll deducted
[25%] group discount - remains after leaving
[Ask HR / or go to site URL] for a customized individual proposal.