Voluntary Short-Term Disability Products

Cost: $3,000; published 2020

Voluntary short-term disability is a mainstay product for any carrier’s voluntary product portfolio, generating more than $1 billion in new sales in 2019 according to the most recent Eastbridge U.S. Voluntary/Worksite Sales Report. Voluntary STD products continue to fill gaps as fewer employers offer traditional employer-paid disability plans to their employees, but new pressure from emerging state disability and paid family medical leave plans on participation and demand presents both a key concern for carriers to monitor and new opportunities for innovation.  Some of the topics covered include:

  • A market overview for voluntary short-term disability products
  • Product structure and benefit specifics
  • Scope of coverage and portability options
  • Underwriting guidelines and practices
  • Costs and commissions
  • Product results for 2019
  • Product challenges and future trends

This Voluntary Short-Term Disability Products Spotlightâ„¢ Report is designed to help carriers stay abreast of current VSTD products available as well as the emerging trends in the marketplace overall. With this data, carriers can better understand how their product compares to the competition.

 

View Table of Contents

1. Executive Summary

A. Report Objectives

B. Methodology

C. Key Findings

2. Market Overview

A. The Overall Voluntary Short-Term Disability Market

B. Employer Perspective

C. Employee Perspective

D. Broker Perspective

E. Key Competitors

3. Product Details by Carrier

A. Product Structure and Specifics

1. Product Platform

2. Definition of Voluntary for Short-Term Disability

3. Types of VSTD Sold

4. Employer-Paid STD Plan

5. VSTD Plan Changes

6. Minimum/Maximum Benefits

7. Benefit Type

8. Maximum Percent Salary Replacement

9. Off-Job Only or On- and Off-Job Benefits

10.Benefit Period Options

11.Definition of Disability

12.Covered Earnings

13.Elimination Periods

14.Pre-Existing Exclusions

15.Limited Benefits for Pre-Existing Conditions

16.Waiver of Pre-Existing for Takeovers

17.Coverage for Mental and Nervous Disorders

18.Limits on Pregnancy Coverage

19.Coverage for Elective or Cosmetic Surgery

20.Other Exclusions

21.Coverage for Partial Disabilities

22.Coordination with Other Plans/Offsets

23.Non-Integrated Plans

24.Changes due to STAT/PFML

25.Waiver of Premium

26.Waiver of Premium/Continuation of Coverage for Lay-Offs

27.Rehabilitation Benefits

28.Additional/Optional Benefits or Riders

29.Additional No-Cost or Value-Add Services

B. Scope of Coverage and Portability

1. Employee Options at Purchase

2. Renewability

3. Portability and Conversion Options for Group Products

4. Multiple Plan Options Allowed

5. Unique Designs by Industry

6. Product Differentiators

C. Underwriting

1. Account Eligibility Guidelines

2. Ineligible Accounts/Industries

3. Employee Eligibility Guidelines

4. Types of Underwriting Used

5. Guaranteed Issue Guidelines

6. Action if Participation Not Met

7. Simplified Issue Guidelines

8. Simplified Issue Underwriting Questions

9. MIB/APS/Pharmacy Checks

10.Full Underwriting Guidelines

11.Open Enrollment Options

12.Undewriting Requirements for Adding Coverage

13.Renewal Process

D. Costs and Commissions

1. Published or Census Rates

2. Issue-Age or Attained-Age Pricing and Age Bands

3. Composite Rates

4. Rate Classes

5. Rate Differences

6. Rate Guarantees

7. Premium Rate Comparisons

8. Writing-Level Commissions

9. Heaped Commissions Requirements

10.Takeover Commissions Reduction

4. Results and Future Trends

A. 2019 Product Results

1. 2019 VSTD Sales

2. Product Profitability

3. Average Participation Percentage

4. Typical Policyholder and Account Demographics

5. Average Annual Premium Per Employee

6. Persistency/Lapse Rate

7. Takeovers vs. New/Virgin Cases

8. Loss Ratio Results

9. Product Challenges

10. Future Product Trends

 

 


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