Long Term Disability Insurance Comes To My Spouse’s Work
Now that we’ve finally got Long Term Disability Insurance sorted out for my spouse and the policy has gone into effect, his work has started offering LTD insurance as well starting November 1st.
Of course.
When my spouse brought the paperwork home Monday, my reaction was just basically “Of course they would now after we spent so much time figuring it out for ourselves.” And then we got down to business comparing the policy we have in effect now through private insurance vs the policy that his work now offers.
The main difference in policies is that his work policy is 60% replacement of income vs the 70% replacement that we have with our private MetLife policy. ANother difference is that the work one does not, if he signs up right now, require a medical exam, which would end up giving us coverage for a slightly braoder range of things. My spouse has a diagnosed (through MRI) problem with one of the discs in his lumbar spine that he does exercises for. MetLife was not impressed with that and wrote an exclusion for lumbar spine problems into his policy. The coverage through work has no such exclusion. So on the off chance that becomes a problem, the work one would cover it. Otherwise the coverage exclusions and inclusions are exactly the same.
The big kicker is his work one will cost him about $12 per month, vs the private one that costs almost $70 per month. The premiums are paid with already-taxed money in both cases, so the benefits would not be taxed if we ever had to use them.
So, we decided to go with the work policy and see how much it would cost for MetLife to become a supplemental policy to that (to cover up to the 70% of income). Depending on how much the premium would be for that (my spouse called them today and they will get back to him by Friday) we’ll make a decision on if we are going to keep the MetLife policy or not. We’d like to keep it, because of course his work one is tied to work and if he leaves his current employer, he can only keep it for an additional 12 months.
And there you have it. I’m happy his work is now offering coverage, I just find it ironic that they started doing so just as we finally got a private policy completely sorted out. We literally just paid our first premium last week.
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October 16th, 2008 at 7:16 am
I think that everyone needs LTD insurance. Too often employers don’t offer this and it is a shame.
Please write a follow up post once you here about the supplemental insurance policy. I would be very interested as to how MetLife does this.
-Fred
October 16th, 2008 at 7:46 am
If it’s any consolation the same thing happened at my place. In my case the premiums are 0 through work and the coverage is the same, so I ended up cancelling my existing policy.
October 16th, 2008 at 9:43 am
That’s a significant difference in premiums. On the other hand, the 10% difference in coverage could mean the difference between being able to make it or not make it if he suffers a disability.
My workplace also offers short-term disability…matter of fact, this discussion reminds me that PeopleSoft managed to drop it from my paycheck, even though I did not ask to have it dropped at open enrollment. With alleged layoffs pending it didn’t seem worth pursuing, but now that I’m still working, I guess I’ll have to go argue about that.
October 16th, 2008 at 10:55 am
@ Funny - That’s why we’re pursuing supplemental coverage through MetLife over the 60% from work. We haven’t cancelled the policy we bought and won’t until we figure out a stop-gap measure.
@ Fred - I shall follow up when I find out something. The agent acted like he does stuff like this all the time so I think it is possible, just hoping the premium is good.
October 18th, 2008 at 3:12 pm
Hey PaidTwice,
One thing to consider is whether or not your spouse can keep the insurance if they’re no longer at that job. That’s why I have both my own term life policy as well as the one I get from work…
October 19th, 2008 at 6:30 am
Hey please be careful about any insurance that doesnt require an exam. Too many times people have spent thousands of dollars in premiums and when something happens the insurance company sends their lackys out to research you or your spouse and any little thing and I mean ANY they will try to bring back to you as proof of why they denied you. Oh and when signing please read the fine print because some companys have (im sorry I cant recall the name for it) but it pretty much means that when you sign it, you are saying that if you are denied that you cant sue. To me disability insurance is like flexible rate mortgages they are great in the beginning and then something happens. I would take the 70 dollars and save it in a savings account or cd.
October 21st, 2008 at 10:09 pm
just be careful though for the pre-existing exclusion. if he goes out within the 12 or 24 months (depending on the policy) for the back condition, benefits may be denied. if the unthinkable happens and the back condition prevents him from working soon, don’t be surprised.