Boring Insurance Question
March 8, 2007 1:42 AM Subscribe
I think I need disability insurance.
I've just been offered a job that I want to take, only, because it's part-time (a job share, actually), it comes with no benefits. I'm covered on my husbands's medical plan, but I need to buy private disability insurance for the maternity leave (I'm not pregnant yet, but plan to be within a year or two).
I'm in Massachusetts, female, age 36, healthy -- any idea of what I can expect to pay? I'm still negotiating salary and want to take this extra expense into account.
I've no idea how much coverage I need, nor which types. Specific recommendations for good companies also would be very welcome.
I've just been offered a job that I want to take, only, because it's part-time (a job share, actually), it comes with no benefits. I'm covered on my husbands's medical plan, but I need to buy private disability insurance for the maternity leave (I'm not pregnant yet, but plan to be within a year or two).
I'm in Massachusetts, female, age 36, healthy -- any idea of what I can expect to pay? I'm still negotiating salary and want to take this extra expense into account.
I've no idea how much coverage I need, nor which types. Specific recommendations for good companies also would be very welcome.
Best answer: There are two types of disability insurance: short term and long term. Short term disability typically covers you from the eighth day after your date of disability until the long term disability kicks in. Long term disability usually covers you from 90 days after the date of disability until you return to work (or die or turn 65, etc.).
Individual disability is VERY expensive, and no one gets individual short term disability. It's so expensive that you're better just saving your money and using it to pay for your expenses in that 90 or 180 days until the long term disability kicks in. Individual long term disability is not a bad idea. It will cost something on the order of 1% of your covered monthly earnings. It's a very rough estimate and can be double or triple that amount, but a policy covering $4,000 of monthly salary will probably end up costing $500 per year. Again, rough estimate and I'd get a quote if you're thinking of going this route. (MetLife is the carrier I'd recommend -- contact your local life insurance broker.)
Maternity leaves, barring something bad happening, are covered under short term disability. Depending on the insurer, you're only going to be considered disabled for between four to six weeks. Instead of bothering with getting insurance coverage for that period, I'd do one of two things:
-Add 6 weeks of salary to whatever salary you're negotiating, or
-Get them to cover you under the group insurance. Most insurers have no problem covering people down to 20 hours/week. Couldn't hurt to see if the employer will agree to get the insurer to amend their contract. If it's a big employer with a codified employee benefits strategy for part-time workers, this has little chance of success. If it's a small employer, you have a shot. We've often amended our clients' policies to cover down to 20 hours/week for disability for situations just like this. (I'm an employee benefits insurance broker in MA.)
posted by MarkAnd at 5:25 AM on March 8, 2007
Individual disability is VERY expensive, and no one gets individual short term disability. It's so expensive that you're better just saving your money and using it to pay for your expenses in that 90 or 180 days until the long term disability kicks in. Individual long term disability is not a bad idea. It will cost something on the order of 1% of your covered monthly earnings. It's a very rough estimate and can be double or triple that amount, but a policy covering $4,000 of monthly salary will probably end up costing $500 per year. Again, rough estimate and I'd get a quote if you're thinking of going this route. (MetLife is the carrier I'd recommend -- contact your local life insurance broker.)
Maternity leaves, barring something bad happening, are covered under short term disability. Depending on the insurer, you're only going to be considered disabled for between four to six weeks. Instead of bothering with getting insurance coverage for that period, I'd do one of two things:
-Add 6 weeks of salary to whatever salary you're negotiating, or
-Get them to cover you under the group insurance. Most insurers have no problem covering people down to 20 hours/week. Couldn't hurt to see if the employer will agree to get the insurer to amend their contract. If it's a big employer with a codified employee benefits strategy for part-time workers, this has little chance of success. If it's a small employer, you have a shot. We've often amended our clients' policies to cover down to 20 hours/week for disability for situations just like this. (I'm an employee benefits insurance broker in MA.)
posted by MarkAnd at 5:25 AM on March 8, 2007
I'm not sure that DI will be the best for pregnancy. If anything, I'd go with MarkAnd's 2 suggestions.
Now, I'll go in a different direction and share ideas on Long-term DI.... sorry, but folks might come across this in a search -- and it's good for everybody to know as much as possible.
You and your spouse should have Long Term DI just in case, but that's different.
Costs will depend on your occupation and how much you make (as well as your health of course). You will only be able to get about 60% of your income insured, otherwise you'd never go back to work.
I threw together a quick quote using one of the insurers above (I'm an advisor, but I'm just giving you ideas on costs -- not asking for anything) assuming:
you're in Alabama (first letter of the alphabet, basically)
Non smoker
Good health
You work a basic desk job
You earn 40K/yr (part-time... if that's all you can document)
Results: cost would be about $87/month for coverage to age 65 (90 day elimination period, $1250/month benefit). I ignored any riders - this is plain vanilla. Riders are "bells and whistles" that enhance the policy -- like a Cost of Living increase to combat inflation.
A 5 year "benefit period" would cost you $51/month.
What are good companies (for Long-term DI)? I guess some decent ones are: Principal, MetLife, Hancock?, Genworth?, probably UnumProvident although they've had some history...., I bet NWM is just fine.
http://iii.org/ has some good info on how these work.
posted by powpow at 6:40 AM on March 8, 2007
Now, I'll go in a different direction and share ideas on Long-term DI.... sorry, but folks might come across this in a search -- and it's good for everybody to know as much as possible.
You and your spouse should have Long Term DI just in case, but that's different.
Costs will depend on your occupation and how much you make (as well as your health of course). You will only be able to get about 60% of your income insured, otherwise you'd never go back to work.
I threw together a quick quote using one of the insurers above (I'm an advisor, but I'm just giving you ideas on costs -- not asking for anything) assuming:
you're in Alabama (first letter of the alphabet, basically)
Non smoker
Good health
You work a basic desk job
You earn 40K/yr (part-time... if that's all you can document)
Results: cost would be about $87/month for coverage to age 65 (90 day elimination period, $1250/month benefit). I ignored any riders - this is plain vanilla. Riders are "bells and whistles" that enhance the policy -- like a Cost of Living increase to combat inflation.
A 5 year "benefit period" would cost you $51/month.
What are good companies (for Long-term DI)? I guess some decent ones are: Principal, MetLife, Hancock?, Genworth?, probably UnumProvident although they've had some history...., I bet NWM is just fine.
http://iii.org/ has some good info on how these work.
posted by powpow at 6:40 AM on March 8, 2007
Response by poster: Thanks, MarkAnd -- exactly what I needed to know. It's a small business and I think they just decided "no benefits for part-time" across the board because health insurance is so expensive, but they might be open to adding me to the group disability plan if the insurer will allow it.
posted by libraryhead at 8:21 AM on March 8, 2007
posted by libraryhead at 8:21 AM on March 8, 2007
I highly recommend staying as far away as possible from UnumProvident or any of its subsidiaries (such as Paul Revere). They work hard to find reasons to deny claims and somehow they have a huge legal support system that makes it practically impossible to win any individual suits brought against them. I would also verify with any other company you decide to go with that they do not have a partner account with UnumProvident, because they may place your policy with them and you're basically under UnumProvident's rules and contracts, and not the company you think you're buying from.
Sorry to go off like that, but I wanted to warn you.
posted by susiepie at 7:30 PM on March 8, 2007
Sorry to go off like that, but I wanted to warn you.
posted by susiepie at 7:30 PM on March 8, 2007
This thread is closed to new comments.
posted by dpx.mfx at 5:25 AM on March 8, 2007