Losing life insurance when going on disability?

[AngelaN]

Greetings,
My DH is finally ready to go on disability. He has ongoing side effects from the chemo/surgery etc - neuropathy, diarrhea and fatigue primarily. He is a sales director with a national role and his job is 100% travel. He managed to work through it until now, but he can not do it any more, especially with enrolling in a clinical trial (fingers crossed) next week. He is under the impression he will no longer have health insurance coverage or life insurance coverage from his employer. Health insurance is okay - I can cover him through my employer. Right now he has $500K coverage for life insurance. If he loses it, we have nothing except the 20K I have with my employer (the max I can get without a physician evaluation). I would suspect with Stage 4 cancer, no one will give him life insurance on the open market. We are investigating if we can continue to pay his employer for it, but if not, what do we do? What have others done in this situation. It is overwhelming to me to think that he will not have life insurance. His child support agreement requires it for his daughter, and I am afraid if something happens to him his ex-wife will then "sue his estate" (as in me) to get the $ she expects.
Stressed beyond belief.

[weisssoccermom]

Are you saying that your husband is going on SS disability OR is he going on the company's short term/long term disability? Two entirely different things.
1. If he is actually going on the company's LT disability, then he shouldn't be losing either insurance....at least for awhile.
2. If he is leaving the company, then yes, he will lose his health insurance (would be able to keep it via COBRA but it is generally cost prohibitive). Most life insurance companies have a program where a former employee can convert the life insurance policy into his/her own name and pay the premiums. It won't be at the cost that the company gets.....it is usually WAY more expensive, and is age dependent. For example, when my son left his employer a few months back to move up to WA state, he was able to keep his life insurance policy through them at very reasonable rates....but then again, he's only 24. When the same thing happened to my hubs 6 years ago, at age 55, the premiums were extremely high.

If, in fact, the life insurance company allows your husband to convert his policy, don't automatically expect the HR department to inform you of that possibility. Either ask them or get the phone number of the insurance company and call them yourself. It certainly is worth a simple phone call.

You are quite correct that he won't be able to get a life insurance policy now or, my guess is ever with a stage IV diagnosis. There is a company called Physician's Mutual which will write a policy ...face value of $10K....which is expensive and has a two year clause in it that they won't pay any benefits in that time frame. IMO, certainly not worth the cost...save your money. I highly doubt that the employer would allow you to keep the insurance at their rates because if your husband is no longer an employee, that would violate the terms of the insurance policy and they could get in a lot of trouble for that.....basically it would be considered insurance fraud. Look into the possibility of converting it with the insurance company. I really believe that it's your best bet. Also, they may allow you to lower the amount of insurance to carry to make the payments more affordable.

[Bev G]

Hi AngelaN,

I'm sorry you're having to worry about this now, and the increased stress it's causing. I have had more experience than I ever wanted with this, but perhaps my experience will be of some help to you.

In January of 2012 my husband was diagnosed with stage 3 lymphoma. He had a number of different chemos, none of which cured is his disease (as generally happens with lymphoma). He mostly worked through chemo. At one point he was on short-term disability, I guess for a couple of months. By 9/13 the lymphoma had progressed significantly. He could no longer work and was given 6-12 months to live. I got a lot of misinformation from his HR department, though it took me a long time to understand that they were not interested in helping. My husband worked as a physician for a very large health care system in Pittsburgh. He immediately went on short term disability. It was tax-free income because it was paid for by post-tax income. I think he got 60% of his salary, but it worked out the same because of the tax thing.

At the same time we completed paperwork for accelerated death benefit payment. It took persistence and a lot of paperwork, and certification by our onc that he was not expected to survive a year. Ultimately the insurance company paid the claim, which was 75% of the policy amount. If he was not gone one-year later, we would love the residual 25% of the policy. (He did survive, thank God, butt has no life insurance coverage and absolutely cannot get any)

In May of last year he had a bone marrow transplant in Vermont and has been cancer-free since then. Once his short-term disability expired at 6 months he went on long-term disability. LTD is sometimes taxed (ours is) but it depends on if the premiums were paid with pre- or post-tax dollars. If your husband's disease was diagnosed AFTER he was employed, the employer provided STD and LTD cannot be discontinued. Due to my husband's age at disability (he's 68 now) his LTD only lasts 21 months (it will be ending in January). So with short- and long-term disability, his benefits provided great help for a total of 27 months. We bought our house in Vermont with the proceeds of his life insurance pay-out. We had to do this because our house in Pittsburgh didn't sell for a year and a half.

It's sounds like your best bet now is to get copies of both long- and short-term insurance policies and READ THEM CAREFULLY. Keep copies of all his medical stuff. I had to consult an attorney to make sure his benefits would continue if he resigned, which they did. My husband started receiving Social Security a couple of years ago because of his AGE, NOT HIS DISABILITY. This is very important! Had he gotten SS because of the cancer the disability insurance would deduct his SS benefit from his monthly disability payments. Since his SS benefit was due to age, not cancer, the disability company can't deduct that amount.

When you or your husband speak with Human Resources keep very careful notes about what they say, who said it, and when the conversation took place. Ask anyone you speak to to send you an e-mail summarizing the call. My husband's place was unwilling to do that and it took me quite a while to figure out why. Write EVERYTHING down (also when you speak with the insurance company, butt reading the policies is very important)

I hope this hasn't been too confusing. I'm certainly not a lawyer, butt I don't think his ex-wife can make a claim on the estate for child-support, butt maybe your husband should think about what he wants to do WRT support of his child(ren) if he does pass away. My husband's former wife has her own 1M policy on my husbands' life. They've been divorced >20 years, butt since the 1.5M he paid her in alimony ( ) apparently wasn't enough, she be in especially great shape when he does pass.

Very best wishes to you,

Bev

[Bev G]

Hi again,

Jaynee was writing while I was so I didn't see her response. We were offered a conversion to a different type of life-insurance (before he got the accelerated death benefit payment) and the policy they offered was crummy and incredibly expense (I think the premium was about 14K per year) My husband's former employer continues to pay his LTD premium. I still don't really understand why, butt we felt a need to get our attorney to have that documented---you sure don't want anything to happen to jeopardize those policies.

Bev

[rwightman]

Most employer paid life insurance policies have a waiver of premium clause that waives the premium while on a disability. I believe the life insurance policy should stay intact while on disability through the employer (at least to a certain age & meeting certain requirements). I would have your husband go to HR and get copies of the policies (most of them won't know the fine details of the policy) and look at the waiver provisions as well as the conversion provisions. The $500K he has now seems high for employer sponsored - did he buy up or is some of that voluntary coverage? If so, those may be easier to convert. I would then call the insurance company directly.

[weisssoccermom]

Angela....can you clarify which type of disability your husband is going on. IF he is still employed and will be going on employer sponsored ST or LT disability, then you should have nothing to worry about with respect to his life insurance. However, if he is leaving his employment and going on SSD...that's an entirely different ballgame.

[cathy123]

My husband was laid off around the time I was diagnosed. Thru his company I had about 200k in life insurance which we paid for, but at subsidized rates He had about the same, plus 2x his salary which was paid by the company and was actually thru a different provider. The 2x coverage went away, but we were able to keep the other insurance, just at higher non subsidized rates (but still reasonable). I just contacted the insurance provider and did not have to deal with hr. They gave me the new premiums and arranged to send us the bills indtead of doing payroll deductions. There was no talk of revisiting existing medical conditions or a new physical.

Don't know if that helps?

[daniel.qin]

Thanks all for the response! I have the same question. Thanks God, my company and my manager! I can work at home for some work. My wife has no job. If I go LDT, I don't know if I can still have the medical insurance and life insurance.

[weisssoccermom]

Generally speaking, most employees who are on LDT can still keep their medical and life insurance as they are still considered 'employees' for a specific duration of the LTD policy....generally what the policy considers the 'own occupation'....and, on average, is about two years. Check the policy if you are talking about an employer sponsored LTD policy. It should spell it out very concisely for you.

If, however, you are talking about SS disability then no, your hub would no longer be considered an employee and would lose all his subsidized benefits (unless they possibly 'retire' him....AND if the company offers 'retiree' benefits) including his life insurance. Again, talk to the actual insurance company regarding a conversion policy. The HR dept helped us coordinate it a few years back.

[janklo]

There should be a 'waiver of premium' clause in any employer provided group life. I work in payroll/hr. If the hr department doesn't know, call the home office of the insurance co. There will be a form if you are disabled for your doc to complete and you'll be approved for waiver of premium.

[weisssoccermom]

Correct me if I am wrong, but wouldn't that 'waiver' only apply if you were: (1) still an employee of the company and (2) were on company ST/LT disability? If, however, someone quits working and goes on SS disability, that would be a mute point.

[Bev G]

Thanks all for the response! I have the same question. Thanks God, my company and my manager! I can work at home for some work. My wife has no job. If I go LDT, I don't know if I can still have the medical insurance and life insurance.

Hi Daniel,

if you go on LTD I don't think you will keep your health insurance, butt can go on COBRA (which as Jaynee said is very expensive) Your life insurance policy should remain intact as long as you are employed.

Best wishes,

Bev

[AngelaN]

Thank you all - I think we need to do more work. He is going on STD, with the expectation he will not return in 12 weeks and end up on LTD. He is not leaving the company, nor retiring. I think we need to get copies of his policies as many of you have stated and then talk with the insurance company. We are not at the point where anyone would say that he has a limited time and therefore we would get the accelerated benefit. I just want to make sure our financial plan is still intact. I will spend some time tomorrow and report back.

[Nik Colon]

I'm very sorry for your situation and hope all works out.

OT, I just have to say every time I see your name it reminds me of my bf who passed away 5 years ago. Her name was Angela Nelson ..... AngelaN, but we always called her Ang. Her initials were AMN, which we always looked at as AMeN

Sorry, I just had to mention it.

Again, best wishes to you

[AngelaN]

Ritz, I am Italian, so my middle name is Marie and my confirmation name is Elizabeth....AMEN!