Voluntary Short-Term Disability Products

Cost: $3,000; published 2017

Voluntary short-term disability (VSTD) continues to be an essential and expected part of any carrier’s voluntary product portfolio. As the number of employers offering traditional employer-paid short-term disability coverage continues to decrease, voluntary coverage is filling the gap and fueling the need for products with flexible benefits that are still affordable.

The purpose of this report is to help carriers stay current on the VSTD products offered in the market. It includes 21 carrier participants representing 25 different VSTD products. The report includes:

  • General market and carrier information
  • Detailed product features and benefits
  • Underwriting guidelines
  • Rates and premium structure
  • Commission and compensation
  • Current trends and challenges surrounding the VSTD market

With this data, carriers can compare their product’s features, benefits, pricing and underwriting guidelines to other products in the marketplace.


View Table of Contents

1. Executive Summary

A. Report Objectives

B. Recommendations

C. Methodology

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 Short-Term Disability (VSTD)

3. Types of VSTD Sold

4. Employer-Paid STD Plan

5. Minimum/Maximum Benefit Amounts

6. Benefit Type

7. Maximum Percent Salary Replacement

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

9. Benefit Period Options

10. Definition of Disability

11. Covered Earnings

12. Elimination Periods

13. Pre-Existing Exclusions

14. Limited Benefits for Pre-Existing Conditions

15. Waiver of Pre-Existing for Takeovers

16. Coverage for Mental/Nervous Disorders

17. Coverage for Pregnancy

18. Coverage for Elective or Cosmetic Surgery

19. Other Exclusions

20. Coverage for Partial Disabilities

21. Coordination of Benefits

22. Waiver of Premium

23. Waiver of Premium/Continuation of Coverage for Layoffs

24. Rehabilitation Benefits

25. Additional/Optional Benefits or Riders

26. Additional No-Cost or Value-Added Services

B. Scope of Coverage and Portability

1. Employee Options at Purchase

2. Renewability

3. Portability and Conversion Options for Group Contracts

4. Multiple Plan Options Allowed

5. 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. Simplified Issue Guidelines

7. Full Underwriting Guidelines

8. Open Enrollment Options

9. Underwriting Requirements for Adding Coverage

10. Late Entrants

11. Renewal Process

D. Costs

1. Published or Census Rates

2. Quotes on Virgin Cases

3. Issue-Age vs. Attained-AgeĀ  Pricing and Age Bands

4. Composite Rates

5. Rate Classes

6. Rate Variations

7. Rate Guarantees

8. Premium Rate Comparisons

9. Writing-Level Commissions

10. Takeover Commission Reduction

E. Results and Future Trends

1. 2016 Results

a. VSTD Sales for 2016

b. Product Profitability

c. Length of Time in Market

d. Average Participation Percentage

e. Typical Policyholder and Account Demographics

f. Average Annual Premium per Employee

g. Persistency

h. Takeovers vs Virgin Cases

i. Loss Ration Results

2. Challenges & Future Trends

a. Product Challenges

b. Product Trends

3. Challenges


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