4 Areas of Operations to Review for Financial Overspend
Group Disability Presentation
1. The Northwestern Mutual Life Insurance Company – Milwaukee, WI
GROUP DISABILITY INCOME INSURANCE
DO KNOW WHAT IS IN YOUR CONTRACT
Derek G. Eskam
307-797-6499
derek.eskam@nm.com
Financial Representative
4. 4
THE THREE C’S
• When accurately review a wage continuation plan you
must review…
– The Company who foundationally supports the plan.
– The Contract, which the company gives you for the plan.
– The overall Cost of the plan.
6. 6
Strength of Contract
• Know what is actually inside your contract.
• Companies will add waivers and exclusions inside the policy to limit
or deny the payment of claims to limit their exposure.
7. 7
Strength of Contract
No AND Definition
No 40 hour work week
No Part Time Work Requirement
No Self Reported Condition Limitations
No Mandatory Rehab
No Maximum Earnings capacity Language
No Third Party/Auto Liability Offsets
8. 8
This is the amount that will be used in
calculating a Partial Disability Benefit.
Definition of Work
Earnings
9. 9
“Your gross monthly earnings from
work performed while disabled.”
Northwestern Mutual’s
Definition of “Work Earnings”
10. 10
This is the Key, which unlocks access
to any possible disability benefit
amount.
Northwestern Mutual uses the
OR
Definition of Disability
Definition of Disability
11. 11
“Income that you receive or are entitled to
receive while you are disabled;
whether you are working or not;
and whether earned prior to or during your
disability.
Disability Earnings also include income you
could receive if you were working to your
maximum capacity.”
Others’ Definition of “Disability
Earnings”
14. 14
Cost of Group Disability
• Typically…
– The cost of a plan is comparable across all carriers.
– How long is your rate guaranteed?
– If appropriately priced during underwriting, you will not
experience claims sticker shock.
Therefore, when choosing the correct plan, we fall back to the
first two criteria.
- Company
- Contract
15. 15
How Group Disability is currently offered
through a broker.
• Unfortunately most group disability is offered through a
broker on a spread sheet showing only numbers.
• Most people then assume that the polices are the same.
Company Guardian Northwestern Mutual Unum
Monthly
Premium
$1,556 $1,570 $1,497
Benefit 60% up to $10,000 60% up to $10,000 60% up to $10,000
Elimination
Period
91 Days 91 Days 91 Days
Benefit Paid
Until
SSNRA SSNRA SSNRA
The above chart is not quote, it is merely an example to convey a concept.
17. 17
Company Financial Strength
• For all group and individual policies, the claims paying
ability is backed by the financial strength of the company
that the plan is written with.
19. 19
• Northwestern Mutual has some unique optional benefits
– These can be added onto a plan to customize it for the
• Employers
• Key Employees
• Highly Compensated
Optional Benefits
20. 20
Lifetime Security Benefit (LSB)
Monthly Benefit
SSNRA90 days
Monthly Benefit
If the severely disabled member is unable to perform two or
more ADLs benefits may continue beyond the normal
Maximum Benefit Period.
This provision may extend both the LTD Benefit and the
ALB Benefit if optionally included.
21. 21
Assisted Living Benefit (ALB)
$10,000
monthly LTD
$10,000
monthly LTD
$10,000
monthly LTD
$3,333 ALB
Benefit
$5,000 ALB
Benefit
No ALB 20% ALB
Benefit
40% ALB
Benefit
A Severely Disabled employee earning $200,000/year salary covered
by a Group policy that replaces 60% of salary
22. 22
Employer Income Protection Benefit
Optional Group DI Feature that can provide:
Overhead Protection
Buyout Protection
Customizable for possible G.I. basis
Tax Advantaged
A Benefit paid to the Employer in the event a Key Person is disabled.
23. 23
Both Long-Term Disability (LTD) and Short-Term
Disability (STD) income insurance is now
available to companies with 2 to 9 people
Recent Enhancements to Northwestern
Mutual Small Group DI
24. 24
Group DI
We cover most any type of business including:
Anesthesiologists
Auto Body Shop
Breweries
Butcher Shop
Coal Mines (not underground)
Dog Trainers
Funeral Homes
John Deere Dealership
Hotels (including Bell Hops)
Mint Farm
Professional Sport Team (Administration/Coaches)
Tool & Dye Company
Veterinarian Clinics
Welders – Oil Pipelines
Zoo
26. 26
In order for us to review your current Group DI, only
the following information is needed.
The Census which needs to include:
• Names
• Date of Birth
• Genders
• Occupations
• Salaries
Copy of ERISA required Certificate (Group
Contract):
