Idi gsi reverse combo discussion presentation for the plus group february 25 2009
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IDI / GSI Reverse Combo Discussion Presentation for The Plus Group February 25, 2009 PowerPoint PPT Presentation


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IDI / GSI Reverse Combo Discussion Presentation for The Plus Group February 25, 2009. Grant Bailie – Manager, GSI Underwriting. L0209020839[exp0210][xGU,MP,PR,VI]. Group LTD vs. Individual DI. Group LTD coverage may not be enough!. Definition of Disability

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IDI / GSI Reverse Combo Discussion Presentation for The Plus Group February 25, 2009

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Idi gsi reverse combo discussion presentation for the plus group february 25 2009

IDI / GSI Reverse Combo DiscussionPresentation for The Plus GroupFebruary 25, 2009

Grant Bailie – Manager, GSI Underwriting

L0209020839[exp0210][xGU,MP,PR,VI]


Group ltd vs individual di

Group LTD vs. Individual DI

  • Group LTD coverage may not be enough!

  • Definition of Disability

    • Many group LTD plans have a 1 or 2 year “own occupation” definition of disability, which then changes to “any occupation”

    • IDI offers “own occupation” coverage to age 65 in most cases

  • Premiums

    • Premiums for LTD plans are constantly changing, depending on the experience of the group, or even the experience of the carrier

    • IDI plans offer non-cancelable and/or guaranteed renewable rates

  • Portability

    • Many group LTD plans are not portable, meaning that coverage is tied to employment. If the insured leaves his/her employer, they often lose the group LTD coverage

    • IDI policies are individually-owned and portable


Idi gsi reverse combo discussion presentation for the plus group february 25 2009

What is GSI (Guaranteed Standard Issue)?

Guaranteed Standard Issue means that MetLife will issue an IDI policy with limited medical underwriting and no pre-existing condition limitation as long as you have been actively at work for the past 90 days and are actively at work on the effective date of the policy.*

* GSI offers are contingent upon underwriting review of the case and are not available to all groups.


Plan designs

Plan Designs

  • Supplemental Buy-Up Plans

  • Reverse Combination Plan


Supplemental buy up plans

Supplemental Buy-Up Plans

Salary

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

To

t

a

l

Co

m

p

e

n

s

a

t

i

o

n

75% of Total Compensation minus LTD

to $XX,000 Monthly Maximum

60% of Salary Income

to $XX,000 Monthly Maximum

180

Days

Age 65

Wage Continuation

or STD

Group

LTD

Individual DI

Uninsured Income


Reverse combination plan

Reverse Combination Plan

Commonly known as “reverse combo”, this plan “reverses” the LTD and IDI coverage, so that the LTD coverage actually supplements the IDI plan.


Reverse combination plan1

Reverse Combination Plan

Description

  • Base IDI with layer of group LTD on top to provide coverage for income not covered by the IDI base plan.

  • IDI plan must have 100% participation.

  • Both the IDI and group LTD should have the same definition of earnings.

  • The following formula is used for the group LTD:

    0% of the first $xxx,xxx of covered earnings

    60% of the next $yyy,yyy of covered earnings

    • Need to verify with group underwriting to be sure this type of plan is available


Idi gsi reverse combo discussion presentation for the plus group february 25 2009

Reverse Combination Plan

$300,000

$200,000

$100,000

I

N

C

O

M

E

Group LTD: 0% of first $100,000 of income

60% of the next $100,000

to a Maximum Monthly Benefit of an additional $5,000

30% of Salary Income

Replacement to

$XX,000

Monthly Maximum

Individual Coverage

60% of Income Up to $100,000

$5,000 Monthly Maximum

Age 65

180

Days

Wage Continuation

or STD

Corporate

Purchased IDI

Group

LTD

Uninsured

Income


Case study ltd rates

Case Study – LTD Rates

  • 1999 LTD Rate = $0.4235/$100 covered payroll

  • 2000 LTD Rate = $0.4235/$100 covered payroll

  • 2001 LTD Rate = $0.4769/$100 covered payroll

  • 2002 – 2005 LTD Rate = $0.6490/$100 covered payroll


Plan design change reverse combo

Plan Design Change – Reverse Combo

  • In 2005, the final plan design was developed to move the first $200k for highly compensated associates from the LTD plan to the IDI plan and new rates were developed

  • 2006

  • LTD Rate = $0.581/$100 covered payroll – for those employees not eligible for the IDI plan

  • LTD Rate = $0.270/$100 covered payroll – for those employees eligible for the IDI plan for income amounts in excess of $200k


Overall effect

Overall Effect

  • LTD rate for execs in the reverse combo plan were lowered by over 58%

  • IDI premiums are non-cancelable, so rates are locked in at issue age

  • Over time, the entire plan may break even or actually be less expensive if LTD rate holds and younger group of IDI participants come on board

  • Combined plan design encourages persistency of both LTD and IDI


How to get started

How to get started

For more information contact your local

Plus Group office

To find a Plus Group office near you:

Go to www.plusgroupus.com and click on the agency locator map or call (800)831-1018


Questions

Questions?


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