Disability Insurance Basics in Oregon
Gaining a clear understanding of the fundamentals allows Oregon residents to select an appropriate disability insurance plan.
The risk of becoming disabled in Oregon
When asked in the LIMRA 2022 Insurance Barometer Study
"How long would it be before you experience financial hardship if the primary wage earner in your household become sick or injured?" People answered:
How Disability Insurance works in Oregon
Generally speaking Oregonians buy disability insurance because it provides a partial income replacement benefit (money) to the wage owner in exchange for paying premiums (money) to the insurance company or Paid Leave Oregon when a qualifying event occurs.
7 Key Components of a Disability Policy
Coverage and Premiums: Oregonians can purchase private disability insurance policies from insurance companies or through their employers. The policy outlines the scope of coverage, including the benefits and duration of disability payments. The insured person pays regular premiums, either individually or through employer contributions, to maintain the coverage.
Definition of Disability: The policy defines what constitutes a disability. It typically includes two main categories: "own occupation" and "any occupation." Own occupation disability insurance pays benefits if the insured person cannot perform the duties of their specific occupation. Any occupation disability insurance pays benefits if the insured person cannot work in any occupation suitable for their education, training, and experience.
Elimination Period: Most private disability insurance policies have an elimination period, which is a waiting period after the onset of the disability before benefits become payable. The insured person must be disabled for a specific duration, such as 30 or 90 days, before receiving disability payments.
Benefit Payments: If the insured person meets the definition of disability and satisfies the elimination period, the insurance company starts providing disability benefit payments. The benefit amount is predetermined based on the policy terms and is typically a percentage of the insured person's pre-disability income.
Duration of Benefits: Private disability insurance policies can have different benefit periods. Short-term disability insurance policies usually provide benefits for a limited duration, such as a few months up to two years. Long-term disability insurance policies can offer benefits for an extended period, such as until the insured person reaches retirement age or recovers from the disability.
Claim Evaluation: When a disability claim is filed, the insurance company evaluates the claim to ensure it meets the policy's criteria for disability. This process may involve reviewing medical records, consulting with healthcare professionals, and assessing the insured person's ability to perform work-related activities.
Return-to-Work Support: Private disability insurance providers often offer vocational rehabilitation and support services to help the insured person return to work if and when their condition improves. These services may include vocational training, job placement assistance, and modifications to the workplace or job duties.
What are Oregon Insurance Underwriters Looking for on Applications?
Disability insurance underwriters in Oregon are likely to focus on occupational risk, income assessment, and the applicant's ability to work in their specific occupation.
4 Focus Areas for Underwriters
Occupational Risk: Disability insurance underwriters primarily focus on the applicant's occupation and the associated risk of disability. They evaluate the physical demands, potential hazards, and injury rates associated with the applicant's specific job or industry. Certain occupations, such as manual labor or high-risk professions, may have higher disability risks.
Income Assessment: The underwriter assesses the applicant's income level to determine the appropriate disability benefit amount. This includes evaluating the stability and consistency of the applicant's income over time.
Medical and Health Assessment: While not as comprehensive as in life insurance underwriting, disability insurance underwriters consider the applicant's medical history, current health status, and any pre-existing conditions that may increase the likelihood of disability. They focus specifically on conditions that may impact the applicant's ability to work.
Definition of Disability: Disability insurance underwriters evaluate how the applicant's specific occupation and policy define disability. They assess whether the applicant would be eligible for benefits if they are unable to perform their occupation or any suitable alternative occupation.
T. Mann Financial can connect you with an underwriter if you have detailed questions.
How T. Mann Financial Can Help Oregon Residents with Disability Insurance
Disability policies can be very complex, let T. Mann Financial in Springfield Oregon help!
T. Mann Financial can help Oregonians determine if you need disability insurance and if so, how much.
T. Mann Financial will start by conducting a thorough needs assessment to understand your specific requirements. They will gather information about your occupation, income, financial obligations, and lifestyle factors that may impact your disability insurance needs.
Existing Benefit Evaluation
T. Mann Financial can assist in evaluating the benefit structure of different disability policies. This includes considering factors such as the percentage of income replacement, benefit duration, elimination period (waiting period), and any additional riders or options available. T. Mann Financial can help you understand the implications of each benefit option and how it aligns with your income and financial requirements.
T. Mann Financial can help Oregonians choose the right policy for their individual needs.
Present Policy Options
Based on the needs assessment, T. Mann Financial will present different policy options available from various insurance providers. We will explain the features, benefits, and limitations of each policy, helping you understand the coverage details and how they align with your specific needs.
Conduct Cost Analysis
T. Mann Financial can provide cost analysis for different disability policies. We can explain the premium amounts associated with each policy option and help the individual understand the relationship between the premium, benefit amount, and coverage features. T. Mann Financial can also discuss any potential premium increases or adjustments in the future.
Customize the Policy
Based on your specific needs, T. Mann Financial can assist in customizing the disability policy by adding appropriate riders or options. These may include features such as cost-of-living adjustments, residual or partial disability coverage, future purchase options, or additional coverage for specific needs.
Comparison and Recommendation
T. Mann Financial can help you compare the different policy options, considering factors like coverage, affordability, reputation of the insurance providers, and customer service. We can offer recommendations based on our experience and knowledge of the insurance market.
T. Mann Financial can help Oregonians apply for Disability Insurance.
T. Mann Financial's 5 Step Disability Insurance Process
1. Once you have selected the type and amount of disability insurance you need, T. Mann Financial will request quotes from private insurance companies.
2. We help you narrow down the list and then to run a side-by side comparison of your top choices.
3. Once you decide which disability policy to purchase we help you complete your application. If testing is required we help get this ordered for you.
4. T. Mann Financial works as an intermediary between you and the disability insurance company and it's underwriters to help ensure that the policy is processed in a timely manner.
5. If the policy is approved and paid for, T. Mann Financial will deliver the policy and provide additional support as needed.
Paid Leave Oregon Program Highlights
While many employers have started making and collecting contributions, Oregon Paid Leave benefits will begin Sept. 3rd, 2023
Purpose: The Oregon PFML program aims to support workers who need time off to care for their own serious health condition, bond with a new child, or care for a family member with a serious health condition. It provides financial assistance during these periods of leave.
Covered Events: The program covers various events, including the birth or adoption of a child, foster care placement, serious health conditions of the employee or their family member, and military exigency leave.
Duration of Leave: Eligible workers can take up to 12 weeks of paid leave within a year to care for a family member or bond with a new child. For the employee's own serious health condition, they can take up to 14 weeks of paid leave. In certain circumstances, such as a combination of events, leave may be extended up to 16 weeks.
Wage Replacement: The program provides partial wage replacement during the leave period. The benefit amount is based on a percentage of the employee's average weekly wage, up to a maximum weekly benefit amount determined by the state.
Funding: The program is funded through payroll contributions. Both employees and employers contribute a percentage of the employee's wages to the PFML fund.
Job Protection: During the leave period, eligible workers are generally entitled to job protection under the Oregon Family Leave Act (OFLA) and the federal Family and Medical Leave Act (FMLA). This means that employees can take the leave without fearing job loss.
Self-Employed Individuals: Self-employed individuals have the option to opt into the PFML program and receive paid leave benefits. They contribute to the program based on their self-employment income.
Learn more on the Paid Leave Oregon website.
Employer's Choice: Equivalent Plans
Employers may provide equivalent paid leave plans for their employees as an alternative to participating in the Paid Leave Oregon program.
Equivalent Plan Requirements
Include all employees with continuous employment of at least 30 days.
Ensure employee contributions are not higher than those of the state plan.
Provide benefits that are equal to or greater than the state plan, which include:
Granting leave for family, medical, and safe-leave purposes.
Offering up to 12 weeks of paid leave per year (with an additional two weeks for pregnancy-related medical leave).
Allowing employees to use paid leave either on individual days or consecutively.
Imposing no additional conditions or restrictions on employees' use of paid leave.
3 Reasons to consider an equivalent plan for your business?
1. Lower Premiums- If you have a fairly healthy workforce you could potentially pay a lower rate than the 1% tax, saving your business money.
2. Private Administration- Some businesses prefer to work with private insurance companies that could have decades of experience with disability administration rather than a new government program.