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When the benefit is paid on time, people rarely complain.
... you're too funny. The complaint is not about being paid "on time"...just start with being "paid" at all.

Nothing surprising in the article. My aversion to CI is simply the fact that they are a little too specific on what constitutes a claim. A claim which has no direct relationship to need or income.

That said, the individuals that suffered those specific ailments are obviously quite happy they had the coverage. Perhaps they may have preferred the claims experience to have gone better but I doubt they regretted buying the policy.
... again, the contradiction here. Of course, the individuals who qualified for the CI claim would not have regretted buying it as that insurance served their need and CI would not have any relationship to income as it's not "income" dependent. That would be DI. You do know they're different products or the difference between the 2 ... after all these posts.
 

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I have both good (previous LTD provider) and bad (new LTD provider) from the same co-worker.

Cheers
... in the claims sense or what? I'm talking from a claimant's point, not the provider or advisor. And I can't see your co-worker having 2 LTD "claim" providers.
 

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Beav. we all get your point. If you own insurance and don't get paid a claim, when you think you should, you will be upset and you will most likely try to tell everyone. The easiest way to do that today is on social media.

The problem is that these people did not buy the insurance because they thought it was something they always wanted to own. They bought it because they needed it. If you look at how many people own insurance and how many claims are applied for each and every year, you have to imagine that a few people will always end up being declined. Without the knowledge of why that is, the fact that they are upset about it, does none of us any good. I mean if someone asked me a question about whether a claim would be accepted or not, all I could do is give my opinion and in almost every case I would say, it never hurts to submit a claim.

I think J4B is quite aware of this potential issue so unless you have something helpful to add, please quit mis-understanding my posts and replying to them. It is becoming tiring.
 

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Beav. we all get your point. If you own insurance and don't get paid a claim, when you think you should, you will be upset and you will most likely try to tell everyone. The easiest way to do that today is on social media.
... it's not me. It's my (close) friend who went through hell to get the claim paid. As I mentioned previously, don't take my words for it, google it. Fortunately, social media isn't just for one-sided fairy tales-telling nor free and false marketing.

The problem is that these people did not buy the insurance because they thought it was something they always wanted to own. They bought it because they needed it.
... obviously then what's insurance for? Why bother even to have insurance companies (other than to make profits, we get this too.)

If you look at how many people own insurance and how many claims are applied for each and every year, you have to imagine that a few people will always end up being declined.
... how do you know it's a few? Do you have the stats to back it up?

Without the knowledge of why that is, the fact that they are upset about it, does none of us any good.
... well, that's what social media is there. We can also be thankful for programs like CBC's Go Public ... otherwise, all the dirt gets hidden.

I mean if someone asked me a question about whether a claim would be accepted or not, all I could do is give my opinion and in almost every case I would say, it never hurts to submit a claim.
... you're not qualified to determine a claim is accepted or not and besides, if you did pay for the premiums or "bought" the insurance as it's intended for (protection), then why wouldn't you submit the claim?

I think J4B is quite aware of this potential issue so unless you have something helpful to add, please quit mis-understanding my posts and replying to them. It is becoming tiring.
... of course, J4B is aware of the potential issues at this point as he has determined to self-insure. And I haven't misunderstood your posts - I'm only replying because your posts are misleading. If you're trying to be warm and fuzzy, I can offer you my cat's mat to hold.

And if you're tired of reading, then I suggest you stop posting first.
 

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... in the claims sense or what? I'm talking from a claimant's point, not the provider or advisor ...
Employee that went out on LTD twice.


... And I can't see your co-worker having 2 LTD "claim" providers.
You've never heard of an employer changing benefits providers over time?

The first LTD leave was easy according to my co-worker with one LTD provider.

He was then back at work for years, during which benefits providers, including LTD changed.

The second LTD he lodged a complaint with HR as he didn't appreciate being at home, spaced out on medication and having the LTD rep basically telling him he was okay to work, why wasn't he back at work and if he wasn't back at work tomorrow, his LTD claim would be canceled.


Cheers
 

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Discussion Starter #86 (Edited)
I've decided to self-insure DI but still am considering CI.

And yes I am aware that they only cover a specific set of illnesses, and many things are excluded and wouldn't qualify as insurable. I am just thinking about this and trying to understand the big picture, to get a sense of what the insurance is worth to me. I'll give you a rough idea ... if I could get a 500K payout policy on a list of illnesses/injuries that I think sounds pretty comprehensive, and such a thing only cost me $1,000 per year in premiums, I'd probably do it. It would be just about impossible to self insure and 500K payout would far exceed what I could accumulate myself into a "health reserve fund"... even if I account for 50% chance of the insurer paying out.

Self insuring by building up extra savings, instead of going with CI, does seem possible but I suspect there is also a psychological element. Even if I have well in excess of 500K savings, I could imagine I might try to scrimp and save on expenses in the name of preserving my wealth. The CI payout provides a lump sum which will be easier to actually spend on medical needs. This could be an advantage, versus asking myself to pay big expenses out of my own savings.

So I think there's a psychological advantage of "separating out" the health reserve fund (turning it into a CI payout) from my own personal savings especially when talking about seriously large expenses. Of course, then one has to consider the probability of getting money from CI at all, and that's where I hope to use my general judgement in weighing those things.

I think that 10 or 15 years from now, I'll probably be wealthy enough to self insure for CI.

Am I correct in understanding that CI payouts are not inflation adjusted?
 

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... it's not me. It's my (close) friend who went through hell to get the claim paid. As I mentioned previously, don't take my words for it, google it. Fortunately, social media isn't just for one-sided fairy tales-telling nor free and false marketing.

... obviously then what's insurance for? Why bother even to have insurance companies (other than to make profits, we get this too.)

... how do you know it's a few? Do you have the stats to back it up?

... well, that's what social media is there. We can also be thankful for programs like CBC's Go Public ... otherwise, all the dirt gets hidden.

... you're not qualified to determine a claim is accepted or not and besides, if you did pay for the premiums or "bought" the insurance as it's intended for (protection), then why wouldn't you submit the claim?

... of course, J4B is aware of the potential issues at this point as he has determined to self-insure. And I haven't misunderstood your posts - I'm only replying because your posts are misleading. If you're trying to be warm and fuzzy, I can offer you my cat's mat to hold.

And if you're tired of reading, then I suggest you stop posting first.

Where to start with you. Seeing the stats for claims is not necessary. I doubt it is on the internet because if it was you would have posted it yourself. This is your point, not mine. Forget I said they would pay a claim at all. Again, you are very tiring. We know there are going to be declines, before we even investigate it, simply from the lack of understanding in these products. To go find out that they exist is pointless.

You need to understand that there is so much money in a claim that if a benefit was actually merited these people would be talking to a lawyer, not a bunch of random people,who could care less, on the internet. The lawyer would not even ask for a fee but only a percentage of the benefit paid.

The other more important point was that we don't have much choice. In the world we live in, at times, we need to buy insurance. That was my point. It is a risk we have to take. So whining on about this friend of yours or the angry people on the internet does no one any good. If that is all you have to add, you can stop. You've done a great job pointing that out. We got it. Thanks.
 

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Employee that went out on LTD twice.
... are you certain it's LongTD and not ShortTD because being able to go on LTD (aka paid for) twice is like winning the lottery jackpot.

You've never heard of an employer changing benefits providers over time?

The first LTD leave was easy according to my co-worker with one LTD provider.

He was then back at work for years, during which benefits providers, including LTD changed.
... yes, it's all possible. But then I'm surprised the 2nd carrier would paid if the insured had already claimed an LTD, even with another provider and is of a different disability.

The second LTD he lodged a complaint with HR as he didn't appreciate being at home, spaced out on medication and having the LTD rep basically telling him he was okay to work, why wasn't he back at work and if he wasn't back at work tomorrow, his LTD claim would be canceled.

Cheers
... and so what does this mean? Someone legitimately disabled is not only threatened who paid for insurance that is not being honoured as per the insurance contract. Hmmm ... is this how that business is supposed to work?
 

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... Am I correct in understanding that CI payouts are not inflation adjusted?
... correct. Payment is a lump-sum and $500K is ALOT of insurance with alot of that requiring medical evidence (aka medical examination, tests, not just questions).

Re the notion of DI/LTD being "inflation" adjusted, you have to pay extra for that. It's not a freebie.
 

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Where to start with you. Seeing the stats for claims is not necessary. I doubt it is on the internet because if it was you would have posted it yourself. This is your point, not mine. Forget I said they would pay a claim at all. Again, you are very tiring. We know there are going to be declines, before we even investigate it, simply from the lack of understanding in these products. To go find out that they exist is pointless.
.. you don't have to re-start with me as you already did. If you find me tiring, then I repeat don't read my posts and respond. But then you can't because you know I'm telling the truth. I'm unable to elaborate on my friend's case for privacy reason, hence, I cited about checking the internet for all the horror stories. But then you go sugar-coating that the internet is only full of "negative" stories as you can't give even one positive one to counter my argument. Which is okay with me as most of us, not in the industry, knows just how inherently biased those who are.


You need to understand that there is so much money in a claim that if a benefit was actually merited these people would be talking to a lawyer, not a bunch of random people,who could care less, on the internet. The lawyer would not even ask for a fee but only a percentage of the benefit paid.
... bingo, right from the horse's mouth.

The industry's practice is "all claims" has "no merit". If your claim is to be "ever" paid, you would need to be first sent to the ringer, or find yourself a lawyer "to have any merit". All in the midst, the insured is sick, disabled and financially-lacking. Is this how insurance works? Sounds very much like it so thanks for the validation.


The other more important point was that we don't have much choice. In the world we live in, at times, we need to buy insurance. That was my point. It is a risk we have to take.
... ya, obviously, an additional risk. You paid for false protection.

So whining on about this friend of yours or the angry people on the internet does no one any good. If that is all you have to add, you can stop. You've done a great job pointing that out. We got it. Thanks.
... why are you so insistent that I stop opening the pandora box? Scare of the truth or is your job on the line?

Like I said previously, I'll only stop posting if you stop responding/posting.
 

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Thanks for the advice. I will stop reading your posts. It is a two way street. You either also have to stop reading mine or at least stop mis-reading mine.
 

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Thanks for the advice. I will stop reading your posts. It is a two way street. You either also have to stop reading mine or at least stop mis-reading mine.
... agree and same to you.
 

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Employee that went out on LTD twice.
... are you certain it's LongTD and not ShortTD because being able to go on LTD (aka paid for) twice is like winning the lottery jackpot.
LTD kicks in at four months where the employee was talking about six months or longer.


... yes, it's all possible. But then I'm surprised the 2nd carrier would paid if the insured had already claimed an LTD, even with another provider and is of a different disability.
The employee most were talking about went off on LTD for something like three times, at least a year at a time with the same disability.

I have no idea if other employers are signing up for LTD that somehow limits employees to a single LTD claim, whether the LTD provider is the same or not. The employers I have worked for have usually allowed multiple LTD claims. The limitation I have seen is where too long LTD with multiple LTD claims have translated to the particular employer being declared redundant or similar by management.


... The second LTD he lodged a complaint with HR as he didn't appreciate being at home, spaced out on medication and having the LTD rep basically telling him he was okay to work, why wasn't he back at work and if he wasn't back at work tomorrow, his LTD claim would be canceled.
... and so what does this mean?

Someone legitimately disabled is not only threatened who paid for insurance that is not being honoured as per the insurance contract.
It means that if the LTD provider had been able to intimidate the employee into going back to work, the LTD payments would have stopped.


... Hmmm ... is this how that business is supposed to work?
Is business supposed to declare redundant an employee with 20+ years with the company that has a heart attack at work where an new posting has the same responsibilities, same staff reports, same salary range but a different title?


Basically, it's a wide range out there where some have smooth experience, some have to do some work but don't have it that bad, some have a rough time and some have to resort to lawyers.

Cheers
 

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Group insurance is underwritten completely differently then individual insurance. That is why an employee can go on LTD quite a few times. With individual DI, the insurer would see that pre-existing condition, during underwriting, and would exclude it or decline the policy entirely. With group, as most of us should be aware, there is no medical underwriting for the basic group plan. All employees are eligible.

The insurer deals with the risk of pre-existing conditions, in group plans, in two ways:

1)First, they assume some people in just about every employee group will have some pre-existing conditions. This is dealt with by the fact that even the very healthy are required to join as well. So the insurer just costs it out accordingly and deals with pre-existing conditions that way. The easy money they make on the healthy employees goes towards paying the increased cost of the less healthy ones.

2) Secondly, the premium for group insurance is not guaranteed for the life of the policy, as it is with individual insurance. It is reviewed every year. So if the insurer sees a bad claims experience with their group customers, they simply raise their price to account for it. The employer either pays this amount or cancels the insurance. Either way, the pre-existing conditions don't have the same detrimental effect on the insurance industry as they would with individual policies, where the price is guaranteed for the life of the policy.
 

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Discussion Starter #95 (Edited)
Wow, there's no inflation adjustment on something like 500K of CI policy? That's a big factor in the math. While 500K is a big amount for me today (I don't have a spare 500K sitting around), in 10 years @ 3% inflation this erodes considerably. And it's very reasonable to think that medical costs would increase at least at that inflation rate.

This suggests to me that if I ever got a policy like this, I probably only need 10 years of coverage. After that, inflation has knocked down the value of 500K significantly, to the point where I can self insure. I can't imagine that someone would buy a CI policy for, say, 25 years. Wouldn't even mild inflation make the payouts useless?

Question for Optsy and others who know about insurance... if the insurer does offer an inflation-adjustment option, is it typically over-priced or fairly priced?
 

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Almost always over-priced unless it is just a direct annual increase to the plan. In other words if it is a 2% or 3% annual increase, they price it accordingly, but if it is indexed to CPI, they will need to add a risk factor to the pricing, to pay for that unlikely weird inflation event. Since that risk payment has no direct value it appears as over-valuation of this rider.

Disability Insurance offers some increasing benefit riders, as well as annuities, but I have not heard of it in CI.

Keep in mind, that anytime I ever saw it quoted, I would do what I suspect anyone would do. I compare the indexing price to how much benefit one might get without indexing. For example, if $100,000 of benefit, with a 3% annual increase was $1,600 per year, and the same benefit without inflation protection was $1,100 per year, then it is fairly accurate to say that $1,600 could buy $1,600/1,100 x $100,000 = $145,000 of non-inflation protected benefit.

Fairly quickly, the prospective customer who understands simple math, is going to stop worrying about a claim happening many years from now, and start worrying about a claim happening 1 or 2 years from now. If they took the inflation protection, they would only get approximately $106,000 of benefit, if their issue happened in 2 years and they could have bought $145,000 of regular protection, for the same amount.

The above numbers are just a made up example but what it show is that there is never a clear answer, since that answer will be determined by the future, which is anything but clear. So, even if they have inflation protection, I have found that very few people ever buy it. Not because they will never need it, but because of the uncertainty of when a claim will take place and the effort one puts into making sure they cannot blame themselves for buying the wrong policy and/or feature.

In my experience inflation adjustment is usually perceived as too expensive, when it is available.
 

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Could that be because we've had very low inflation for 30 years?
That would be part of it. As I said, anytime they offered complete indexing to CPI is was rediculously priced, due to the uncertainty of the cost of that to even the insurance company. If it was 2% annual or 3% annual, then the customer had two things to think about. Would those amounts deal with inflation. Well, we can never know, so the answer is no. 2nd, they can directly relate the cost of it to its benefit. Since $1 paid by an insurance company usually is priced the same as any other dollar paid, that part was a wash. So the customer now had to decide, if there was no deal one way or the other and I have a choice of a big benefit now or later, they almost always take it now. That would mean going with inflation protection. That is how I saw it usually go.

With DI it requires two riders, that does not help the clarity of the policy any when one needs to explain them. To be fully protected you would need the indexing of the protection before you are on claim and of course, you need the indexing of the benefit while you are on claim. The first one will be called something like a "guaranteed insurability" rider and the 2nd one will be an "increasing benefit" rider. The 1st one says that on certain anniversaries, you would have the right to increase the benefit by a certain amount without having to prove medical insurability. You would need to prove that your current income justified the new amount. As I said, they will do everything they can to make sure you are not over-insured, in any way.

Again, all of that tends to end up as a "when in doubt, leave it out" kind of ending.
 

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Discussion Starter #99
I suspect, from what I've learned so far, that adding inflation protection to the insurance I want would be too expensive. Instead I'd probably go with a policy of limited time horizon (maybe 10 years) and realize that inflation could erode the value of it. I'll assume I'll have enough money in 10 years to self-insure going forward; in fact, I almost have enough now but I need a few more years.
 

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James, wanted to share my recent experience with an insurance company. I know we talked a lot about what coverages you would have and wanted to discuss with the insurers before purchasing the policy.

Well, I already have a policy. It’s for basic homeowners property/liability. I plan on taking on a volunteer position with a local association. There is protection through the association for liability but I wanted to see if my personal policy would offer any additional protection. I submitted a web query to my insurers and was told the question was sent to underwriting for further review. I then got a call a few days later. They told me to review my policy myself (they are sending another hard copy by mail) and that they could not answer questions on hypotheticals or unique situations. The rep did say that the claims department might have an opinion but they wouldn’t talk to me until a claim was filed.

Seems like poor service. I’ll try again when I calm down. You would think you would be able to call a insurance company directly and say...”I need, or do you have, insurance that will protect me from XX”. I guess there are thousands of opportunities where one may volunteer and they can’t detail the risks or coverages for all of them. In our association, we have volunteer electricians, plumbers, arborists, accountants, pool operators. It’s quite extensive.
 
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