Voluntary Long-Term Disability Plans

Cost: $3,000; published 2019

The opportunity for voluntary long-term disability (VLTD) sales continues to grow each year as more and more employers move away from full or even partial funding of disability benefits for their employees.  According to Eastbridge’s latest employer research, MarketVision: The Employer Viewpoint™ published in 2018, only 44 percent of U.S. employers are offering long-term disability on any basis (employer-paid, employer/employee share or 100% employee-paid voluntary) as an employee benefit.  While the percentage of both the employer-paid and employer/employee share VLTD offerings has steadily decreased, the key area of growth in the market is in the number of employers offering 100% employee-paid VLTD to their employees. 

The purpose of this report is to review the current state of the voluntary long-term disability market and provide detailed information about eighteen different VLTD products currently being offered.  With this information, carriers can better understand the market as a whole, as well as compare how their product “stacks up” relative to the competition.


View Table of Contents

1. Executive Summary

A. Report Objectives

B. Methodology

C. Key Findings

2.Market Overview and Competition

A. Market Overview

1. The Overall VLTD Market

2. Employer Perspective

3. Employee Perspective

4. Key Competitors

3. Product Details by Carrier

A. Product Specifics

1. Definition of Voluntary

2. Product Platform

3. VLTD Products Offered

4. Length of Time in Market

5. Minimum/Maximum Monthly Benefit Amounts

6. Flat Benefit Increments/Percent of Salary

7. Maximum Percent of Salary Replacement

8. Employee Benefit Amount Options

9. On-and/or-Off-the-Job Benefits

10.Benefit Period Options

11.Definition of Disability

12.Covered Earnings Definition

13.Elimination Period Options

14.Pre-Existing Exclusions

15.Waiver of Pre-Existing

16.Coverage of Mental and Nervous Disorders


18.Partial Disability Coverage

19.Coordination of Benefits

20.Waiver of Premium

21.Rehabilitation Benefits

22.Other Benefit Provisions or Value-Added Services/Features

23.Optional Benefits or Riders

24.Employee Choices Allowed


B. Continuation of Coverage

1. Circumstances for Continuation of Coverage

2. Conversion/Portability Provision

C. Underwriting

1. Unacceptable Accounts

2. Account Level Underwriting

3. Employee Eligibility Guidelines

4. Guaranteed Issue

5. Simplified Issue

6. Full Underwriting

7. Open Enrollment Options

8. Requirements for Increasing Coverage

9. Late Entrants

10.Renewal Process

D. Pricing/Costs

1. Census Rating

2. Quotes on Virgin Cases

3. Percentage Mix of Takeovers and Virgin Cases

4. Age Bands vs. Composite Rates

5. Rate Differences

6. Rate Guarantees

7. Rate Comparisons

E. Commissions

1. Commissions Structure

2. Reduction of Commissions for Takeovers

3. Producer Bonuses or Special Incentives

4. Carrier Results, Challenges and Trends

A. Carrier Results

1. Average Participation Percentage

2. Typical Policyholder/Account Demographics

3. Average VLTD Annual Employee Premium

4. Sales Results

5. Profitability

6. Differentiating Product Features or Benefits

B. Challenges, Trends and Future Expectations

1. Product Challenges

2. Future VLTD Trends

3. Future VLTD Sales

C. The Employee View of Voluntary

1. Ownership of Voluntary

2. Voluntary Products Owned

3. Number of Voluntary Products Owned

4. Interest in Buying on a Voluntary Basis

5. Reasons for Buying Voluntary

6. Preferences for Learning about Voluntary

7. Enrollment Methods

8. Satisfaction with Enrollment

9. Importance of Online Capabilities

D. Carrier Viewpoint

1. Small Case Sales by Carrier

E. Broker Viewpoint

1. Top Products Sold

2. Enrollment Methods

3. Voluntary Carriers Used

4. Greatest Administrative Pains

5. Biggest Threat to Voluntary Business

6. Needed to be More Successful with Voluntary


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