SOURCE: Business Benefits Insurance

April 22, 2008 09:00 ET

Long-Term Disability Insurance Language Demystified by Benefits Expert Jim Edholm in Latest Article for Employment Relations Today

ANDOVER, MA--(Marketwire - April 22, 2008) - Which contractual provisions have the largest impact on the employee's likelihood of collecting long-term disability? What constitutes a disability in the first place? And what can employers expect to pay for such policies? The answers to these and other insurance questions, as benefits thoughtleader Jim Edholm notes, can be baffling without an adequate understanding of the industry language.

In his latest article, "Long Term Disability Insurance for Your Employees: To Choose the Best Coverage, Study the Language!" published in Employment Relations Today, Edholm debunks common perception, translates industry language and provides a thorough analysis of long-term disability contracts.

"The key is to strike a balance between the likelihood of collecting and the price," writes Edholm, President of Business Benefits Insurance (BBI). "Selecting the right contract provisions for each category of employee attains that balance."

Understanding the contract provisions, however, is a challenge onto itself. As Edholm points out, small words like "and" "or" "each" and "all" can have very large ramifications for the employer.

"For some employees, that 'and' can cause real problems," writes Edholm. "For example, if you have a long-maturity sales process and your sales people are paid commissions today for work they performed six months ago, when does a disability start?"

Edholm continues, stating, "The 'and' definition requires both a loss of duties and a loss of income. When first disabled, the rep has lost his duties, but his income isn't changed. So he flunks the earnings test -- he's not disabled under the contract until his commissions drop by 20 percent or more."

"You can craft a disability protection program that ideally suits your company's specific needs," he concludes. "Starting with the single most important contractual provision -- the definition of disability -- you can assure that you only pay for as much protection as each class of employees needs."

Jim Edholm is President of Business Benefits Insurance (BBI), an employee benefits planning firm in Andover, MA. He has worked with employers for more than 25 years and can be contacted at (978) 474-4730, via his website or via e-mail

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