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Help clients take advantage of key disability insurance differentiators
Disability insurance can be complex. And that’s why it’s important for clients to have a good handle on what’s in their disability contract. Just one word or phrase can make a big difference when – or if – an employee qualifies as disabled.
Key definitions that differentiate our coverage
For both short-term disability (STD) and long-term disability (LTD) coverage from Principal®, there are some important definitions that play a role in who’s covered and how:
- “Or” definition of disability. The Principal “Or” definition provides comprehensive income protection, with a focus on returning to work. Using the “or” definition, employees qualify for benefits by meeting either of the following criteria: They’re unable to perform the majority of substantial duties of their own job (for STD) or own occupation (for LTD) OR they’re unable to earn 80% of their pre-disability income while working in a modified capacity. This means employees who aren’t totally disabled may still qualify for benefits from day one.
- “Own job” definition. When it comes to returning to work, many disability insurance carriers have “own occupation” language in their contracts for both STD and LTD. The Principal contract provides an “own job” definition for STD. That means we look at the job the employee was performing on the date of the disability—not the occupation.
- Unable to earn 80%. Many disability contracts require 20% loss of income for benefits to start being paid, but at Principal an employee needs to be “unable to earn 80%” of their pre-disability income. The difference can be significant. Income based on commissions, services, or billable hours may not experience an immediate income loss when disabled. The “20% income loss” language doesn’t recognize the immediate impact of a disability because income from these sources can continue after the disability begins. The “unable to earn 80%” feature acknowledges the impact of the disability immediately, so the employee qualifies for benefits sooner.
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Recent news
- New lower participation requirements. We now offer employer-paid coverage to groups with just two employees. See updated Products and Services Guide
- New Critical Illness* product available in New York on July 1. See current state approvals
- DIAM is here—and so are new resources. May is Disability Insurance Awareness Month. Take advantage of this opportunity to talk to clients about protecting their most important asset—their income. Explore new tools and materials
- Redesigned Find a Dentist tool. The updated tool includes a simplified search with less input and selections required, new “pinpoint your address” function, a responsive experience for mobile users, and more. See the redesigned tool
*Specified disease in NY.
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Let's connect
Contact me if you'd like to talk about disability insurance options from Principal.
Earle King
Dir of Sales-Group Benefits
king.earle@principal.com
6103316433
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711 High Street, Des Moines, Iowa 50392
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