Maryland Bar Bulletin
Publications : Bar Bulletin

January, 2005

Make Disability Income Benefits a Priority
By John C. Morris

Insurance, Benefits, Investments and Financial Planning: for individuals, each of these areas can play an important role in the formulation of a sound financial strategy. However, for professionals and business owners, the area of Benefits often takes center stage because of its significant cost to employers and its substantial benefit to employees.

In the Benefits area, one of the challenges faced in developing a sound benefits program for business clients and professionals is how to provide a comprehensive and effective program while maintaining cost efficiency for the program as a whole. In order to accomplish this goal, the many (and sometimes competing) benefit needs of the business or practice and its employees must be taken into account.

The two most talked-about employee benefits are usually health insurance and retirement plans, and while they are both important and integral to a sound benefits plan there is another equally important yet often-overlooked benefit: disability income (DI) insurance. In light of a 2001 study conducted by the Consumer Federation of America and the American Council of Life Insurers, which reported that “a large majority of U.S. workers, 82 percent, either have no long-term disability income coverage, or coverage they believe is inadequate”, it seems that neither individuals nor businesses are making disability income insurance a priority.

Why is DI Insurance So Important?

The virtual elimination or significant reduction in income that can result from an illness or injury can redirect the course of one’s life and have far-reaching consequences for your family. All of a sudden, providing life’s necessities (food, housing, clothing, etc.) could constrain your ability to provide life’s niceties (a car, college for your children, savings for retirement, etc.), and eliminate life’s luxuries (vacation, travel, a second home, etc.).

Why do many companies not include DI insurance in their benefit offerings? The answer obviously differs for each individual company; however, the most common feedback suggests that the rising costs for health insurance dominate benefits budgets and reduce the variety and value of other benefits that can be offered. This is certainly a valid concern, though not an insurmountable one.

There are many different ways to structure employer-sponsored DI insurance plans to make them efficient and affordable. They can either be paid for entirely by the employer or the employee or some combination of the two. No matter who pays the premiums, however, the overall cost of DI insurance can be affected by any of several modifications to the program:


Reduce or extend the amount of time before one receives benefits.


Reduce or extend the length of time benefits are payable.


Raise or lower the amount of benefit that is payable to the insured.


Include or eliminate additional optional benefits.

Devising a balanced Benefits program, including DI insurance, can be challenging, but it is not impossible. It is important to prioritize when choosing among the many types of benefits available, and DI insurance should be right near the top when setting priorities for your employees’ benefits.

John C. Morris, CLTC, is an associate of FranklinMorris, Coordinating Broker for the Bar Associations Insurance Agency, Inc. For more information on the insurance benefits available to MSBA members, visit



Publications : Bar Bulletin: January, 2005

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