For small groups seeking high-limit voluntary life and LTD insurance, individual policies might be more suitable than group coverage, especially if the group desires benefits beyond the typical scope of small group plans. The guaranteed issue limits and even the maximum limits with underwriting might be relatively low for groups with 2-5 employees.
Answer from ChatGPT:
For a small group seeking voluntary life and Long-Term Disability (LTD) insurance with high limits, several considerations are crucial:
- Affordability: High-limit policies can be more expensive. Assess the group’s ability to afford premiums without straining their financial resources.
- Underwriting Requirements: Higher limits might require more extensive underwriting, including medical exams or health questionnaires.
- Group Size and Participation Rates: Insurers often have minimum participation requirements. Smaller groups may face challenges meeting these if not all members opt-in.
- Risk Assessment: Higher limits can alter the risk profile, impacting the insurer’s willingness to offer coverage.
- Tax Implications: Understand the tax consequences for both the employer and employees regarding premiums paid and benefits received.
- Policy Features and Restrictions: Examine the features, exclusions, and limitations of the policies.
- Carrier Reputation and Financial Stability: Choose an insurer known for reliability and financial strength.
- Legal and Compliance Issues: Ensure the plan complies with relevant laws and regulations, including ERISA if applicable.