MetLife’s recently entered the specialized long-term disability coverage market and rolled out expanded small-business benefit bundles.
The nation’s largest life insurer has teamed with the Crystal & Company insurance brokerage to provide an LTD plan that enhances income protection for executives in financial institutions with at least 40 employees. CrystalMax offers a monthly benefit of up to $50,000 without individual medical underwriting for coverage that’s 100% paid for by the employer.
That benefit is substantially higher than standard LTD policies, which cover 60% of earnings up to $10,000 a month. Another point to consider is that vanilla offerings exclude bonuses and commissions in the earnings calculation, which can add up to a significant percentage of compensation among this high-earning workforce segment.
Income in financial services has grown dramatically over the past decade, but “Monthly maximums for disability have typically capped out at $25,000. So the product hasn’t necessarily kept up with the need for replacement income,” explains Michael S. Grant, executive managing director of employee benefit services at Crystal & Company, which represents more than 100 financial institutions including money managers, hedge funds, private equity, institutional and retail banking.
When its financial services clients began pushing for more generous LTD benefits to help attract and retain top talent, the brokerage began looking for a specialized product. In view of MetLife’s compliance, legal and underwriting wherewithal, it decided to partner with the insurer to target this market segment.
“We thought it was important to partner with a household name,” Grant adds.
The employee benefits services chief describes the LTD platform as “a trust that we actually built and Crystal owns, which allows us to administer the $50,000 max. That means we will build a rate stabilization reserve, so that if there are dividends to be paid, those will go back to each of the members participating in the trust.”
Noting how it wouldn’t be surprising for someone who works in financial services to be back at their desk the day after receiving radiation or chemotherapy for a cancer treatment, Grant says the sector could be considered “a very good underwriting risk.” It’s exceedingly rare, he says, for a financial-services executive to be out on long-term disability.
Small business offerings
MetLife, meanwhile, has also added life and disability insurance options to the dental, vision and voluntary legal services options it introduced last year for the 10 to 99 employee market. These MetLife Simply Smart Bundles were designed based on data mined from more than 40,000 small firms.
Industry analysts who follow insurer see the moves as a positive.
“Like other life insurers, MetLife is operationally leveraged to the capital markets,” states a recent Morningstar Equity Research report. “This has made for somewhat tough sledding in recent years, with the low-interest-rate environment presenting a material headwind for the company. But this trend looks set to reverse,” and the expected increase in rates “should allow the company to generate better returns.”
Adds Zacks Investment Research: “MetLife’s consistent inorganic growth via acquisitions and divestitures allow it to focus on core growth areas, which in turn, have been paving the way for long-term success.”
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