You’ve heard of Guaranteed Standard Issue (GSI), but have you ever seen it used to underwrite key person disability insurance policies? Here’s how it works – and how it could be a life saver for the businesses you serve.
The Advantage of GSI
When getting a disability insurance policy, it may be necessary to go through a medical underwriting process that can include answering a series of questions and undergoing a medical exam. This may deter some people from pursuing coverage, either because they don’t want the hassle – or because they know their medical conditions could disqualify them for coverage.
When it comes to employee groups, GSI disability insurance can provide a simple solution. Everyone in an eligible employee group – typically a group with five or more employees – can receive a policy with no medical underwriting needed. There are some drawbacks, including shorter benefit periods and set benefit limits, but GSI gives people with pre-existing conditions a way to secure coverage.
The Need for Key Person Disability Insurance
Every business depends on people. If key people are suddenly unable to work, the business can be put in jeopardy – along with the jobs of everyone who works there. Key person insurance provides protection against this possibility.
You may be familiar with key person life insurance, but key person disability insurance also provides important and sometimes overlooked coverage. Many illnesses and injuries don’t result in death, but they do render a person unable to work. Key person disability insurance provides a payout that can be used to keep the business running until the worker can return to work or be replaced. Policies typically provide benefit periods that last between 12 and 24 months.
GSI and Key Person DI: A Great Match
Using GSI to underwrite key person insurance won’t always be appropriate, but in the right situation, GSI and key person policies can be a great match. Specifically, GSI key person disability insurance can be an ideal solution for larger businesses. Here’s why.
Key person disability insurance can cover one or more people who are essential to the company. If a business only needs coverage for a couple of individuals, GSI won’t be an option. This may be the case in a lot of smaller businesses.
However, if a company needs coverage for multiple individuals, GSI can be very attractive. With GSI, all key workers are covered, even if they have pre-existing conditions – and without the hassle of having everyone go through medical underwriting.
This is exactly what one large accounting firm in Dallas discovered. This company needed key person disability insurance for eight partners, as well as any future partners, and the first-ever GSI key person disability insurance policy made it possible.
Want to learn more? Download the case study to see key person GSI in action.