Insurance Agent Forum

[somarco]

I'm a believer in DI, I just feel this is bad positioning, leaving a huge exposure to the business owner.

This is what I have been trying to say, but you did a better job.

[disability Insurance Reso]

There are Major difference between the two insurances and with IDI, unless there are exceptions for Pre-x conditions, have no limits, as WC does, as well as rate and other guarantees!

[djs]

Originally Posted by disability Insurance Reso

There are Major difference between the two insurances and with IDI, unless there are exceptions for Pre-x conditions, have no limits, as WC does, as well as rate and other guarantees!

Huh? Educate me.

Walk me through some scenerios.

Dan

[disability Insurance Reso]

Firstly,WC ONLY covers ON the job injuries (and some sickness that are DIRECTLY attributable to the job).
WC doesn't cover for example, falling off the ladder at home etc., and only pays for a limited period og time and has a cap on how much.
Compared to being paid (depending on your occupation) to 65 with many options that can let you collect MORE under MORE scenerios including, but not limited to, working elsewhere (and collecting the FULL monthly benefit/tax FREE)as the definition of total disability allows!
Larry
(800-551-6211)

[djs]

So, if I fell off the ladder at work, hit my head on the corner of a desk, was hospitalized for a month, had a $300,000 hospital bill, would DI cover this? Probably not. Would Workers comp? Probably. Would my health plan? Probably not (should be covered by workers comp exclusion).

You make a great argument for why you should have DI on top of the workers comp coverage.

Also, from a practical matter, most DI caps are well below the workers comp cap... and yes, DI has a cap if you run the math, so many months until benefits expire times the monthly benefit, plus a few dollars for various things = the cap.

If a business owner has health coverage that includes work related injuries, DI can work to cover the income. If the health coverage excludes work related injuries (most do, though they tend to ignore this on minor things), then there can be a huge exposure here.

Dan

[somarco]

WC covers LOT for work related injury, illness . . . medical . . . accidental death & dismemberment.

Yes, it is job related, not 24 hour, but most DI plans are written on a non-occ basis. Tough getting a DI carrier to issue coverage on a blue worker beyond 5 years.

WC covers permanent partial disability, temporary partial disability and total permanent disability. Haven't seen a blue collar plan that does that.

I guess I am missing it. I just don't see how dropping WC and replacing with a DI plan is doing anything to protect the worker or the employer.

Several years ago I worked with a firm that was developing a 24 hour medical product for large employers that could fund an SIR of $250,000 or higher. The reinsurance was a bit of a problem, and finding TPA's who could adjudicate WC and medical claims was also a challenge. But we never did come up with an effective way of covering the LOT and AD&D portion of the exposure.

I doubt that has changed.

[disability Insurance Reso]

Dan...WC also covers medical bills for on the job injuries, so under your thinking,why carry hospitalization etc.
The point is, there is no one policy that will be ALL things to ALL people!
Rather than giving you piece meal answers, if you wish, give me a call (800-551-6211) and I'll spend as much time with you as necessary and FYI, even some blue collar workers CAN get a benefit period to 65!
Larry
www.di-resource-center.com

[djs]

Larry -

Explain it here, so everyone can learn. Fill in the gaps. Again, I understand (and believe in) DI reasonably well. I just don't understand how it could replace workers comp, except for the income piece.

And yes, you carry medical because you get sick and have injuries off the job. When they are on the job, workers comp covers it (if it is job related).

Dan

[JustinUpright]

Here in Tennessee most employers that I have spoke with do not carry WC on themselves. That is when I show them DI and how it will cover them on and off the job I know everyone here dislikes AFLAC and I am not a cheerleader for them right now either. But they do offer on and off the job DI for Owners of the business.

That being said I just started in the major med field and don't know if their Major Med covers occ related injuries or not but will make sure my clients understand that they should check.

[The DI Doctor]

Do health insurance plans not cover part of what you are describing?

In theory I think its great that Worker's Comp covers medical bills, rehab, and some income. In reality I have watched family go through Worker's Comp and the situation is much different. It would be more honest if they simply said, "Go home and stop breathing, you are hurting our bottom line."

I believe Worker's Compensation is good for some people and some situations. For others situations it is possible to look at the available options between health insurance, disability insurance, and Worker's Compensation to make sure that business and their particular workers have their unique situation addressed as opposed to trying to have one blanket solution work for everyone.

I am specifically a disability expert, and for the reason that I do not apply my time and energy into any other area. As such it is my desire and goal to get the best disability insurance information possible into the hands of financial planners that they may use it in designing a comprehensive financial solution for their clients. When and where Worker's Compensation is not the answer for key employees that have at least 1% ownership, I know that disability coverage can be part of the solution.

Originally Posted by djs

I still don't see how a DI policy covers the same risk. Let's take a scenerio, one we hope doesn't happen...

A worker leans over a railing, falls, breaks his back. Permanently paralyzed.

What does DI cover? A portion of his income for the period of the insurance.

What does workers comp cover? The medical bills, the rehab bills, income, etc.

The DI policy will fall far short, at least the way I see it. Am I wrong?

Yes, minor stuff, no big deal, perhaps. Broken leg.... workers comp would have benefits, not out long enough for DI to kick in. Cut a finger off? Same thing, workers comp would have benefits, not out long enough for DI. Have a back injury, but not catastrophic, out 6 months? Okay, not much workers comp needed, DI might work.

Give me an example where a work injury has better benefits under DI than under workers comp.

I'm a believer in DI, I just feel this is bad positioning, leaving a huge exposure to the business owner.

Dan

[djs]

Originally Posted by The DI Doctor

Do health insurance plans not cover part of what you are describing?

In theory I think its great that Worker's Comp covers medical bills, rehab, and some income. In reality I have watched family go through Worker's Comp and the situation is much different. It would be more honest if they simply said, "Go home and stop breathing, you are hurting our bottom line."

Health insurance plans almost always have language to exclude injuries that workers comp SHOULD cover, regardless of whether there is workers comp or not.

My experience is for minor things, health plans don't really care, they will pay. Once the injury starts involving surgury, you better think twice. If it's chronic, they will also pass the buck to workers comp.

Don't get me wrong. Workers comp isn't as much for the injured party as it is for the employer.

Now, if you want to have a discussion about there being to many different coverages for various things that may happen, causing people to perhaps become insurance rich and cash poor, it would probably be a short conversation. We would all agree.

Why not have your health plan cover you 24 hours a day? It should. Maybe that is the reform we will get (yeah, don't hold your breath).

Dan

[JustinUpright]

Just checked with a business today and they don't have WC on themselves as owners but their major med has a on the job rider. So they are covered there now just need to get them on a DI plan.

[LGilmore]

Usually a business owner has the option to exclude themselves from WC plans. The group health insurance plans have terminology that will cover owners 24/7 for medical costs. Where DI would come in is the income replacement aspect of WC. But most DI would come with at least a 30 day wait and premiums for such a short elimination period would be pretty high so I don't know if it would be practical or "better" financially.

[The DI Doctor]

I agree with alot of what you are saying, Disability can be part of the overall solution, but should not be considered some kind of ultimate or all encompassing solution. That should be considered when speaking of many situations where disability insurance can come into play. Everything has its pros and cons.

Originally Posted by djs

I still don't see how a DI policy covers the same risk. Let's take a scenerio, one we hope doesn't happen...

A worker leans over a railing, falls, breaks his back. Permanently paralyzed.

What does DI cover? A portion of his income for the period of the insurance.

What does workers comp cover? The medical bills, the rehab bills, income, etc.

The DI policy will fall far short, at least the way I see it. Am I wrong?

Yes, minor stuff, no big deal, perhaps. Broken leg.... workers comp would have benefits, not out long enough for DI to kick in. Cut a finger off? Same thing, workers comp would have benefits, not out long enough for DI. Have a back injury, but not catastrophic, out 6 months? Okay, not much workers comp needed, DI might work.

Give me an example where a work injury has better benefits under DI than under workers comp.

I'm a believer in DI, I just feel this is bad positioning, leaving a huge exposure to the business owner.

Dan

[disability Insurance Reso]

Originally Posted by moonlightandmargaritas

I don't have too many clients that would give up 10% of their equity to save on worker's comp...

I agree, besides the owner had better make sure there was medical and hospitalization in place, in the event the worker got hurt on the job in lieu of what W/C would have paid and the income protection policies had a SHORT elimimation period which will possibly far ecceed the cost of W/C!