State Cash Sickness Benefits Calculating DI issue amounts in states that provide benefits

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State Cash Sickness BenefitsCalculating DI issue
amounts in states that provide benefits

• Rhode Island
• New York
• New Jersey
• Hawaii
• California
• Puerto Rico
• Effective July 1, 2002

Massachusetts Mutual Life Insurance Company And
affiliated companies, Springfield, MA 01111
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RI, NY, NJ, HI, and PR

• We need to program around state provided
  benefits.
• How we do this will depend on
• whether there is existing Group LTD
• when the MM benefits will begin

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Existing Group LTD RI, NY, NJ, HI and PR

• Group LTD plans already offset for state
  benefits. A policy with the same or longer
  waiting period as the Group LTD needs no
  adjustment.
• A policy with a shorter waiting period than the
  GLTD needs some adjustments.

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MM policy with a shorter waiting period than the
existing GLTD (RI, NY, NJ, HI and PR)

• 2A/2P and A occ classes with a 60 or 90 day wait
  needs to offset for the state cash benefit by
  using the Short Term Rider 1
• 3A/3D/3P, 4A or 5A occ classes with a 60 day wait
  needs to offset for the state cash benefit by
  using the Short Term Rider 1

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No GLTDRI, NY, NJ, HI and PR

• 2A/2P or A cases must purchase SIR which offsets
  for state benefits
• Only 3A/3D/3P, 4A and 5A occ classes with a 60
  day wait need to use the Short Term Rider 1 for
  the lower benefit amount

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RI, NY, NJ, HI and PR Cash State Benefit Offsets

• HI 1,584
• NJ 1,776
• NY 680
• PR 452
• RI 2,108

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California Rules for State Cash Sickness Benefits

• California has two significant differences that
  require special rules to adjust for state
  benefits
• The state benefit is payable up to 1 year twice
  as long as any other state
• The SIR rider (that offsets for state benefits)
  is not approved for use in California

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California Rules with Group LTD

• If waiting period is 60 or 90 days, then the
  state benefit of 1,960 also needs to be
  subtracted from the replacement ratio figure
• If the GLTD starts the same as or before the MM
  policy, then no additional offset for state
  benefits is needed.

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California Rules without GLTD

• For all occupation classes with a waiting period
  less than 365 days
• Subtract the State Cash benefit of 1,960 from
  the the Short Term Riders 1 and 2 (along with any
  other coverage in force) and have the higher
  benefit start at 365 days

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Discovery

• Not sure how to program around the state
  benefit? Our illustration system will do it for
  you! It will automatically adjust for any state
  benefit depending on the options selected.

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How Short Term Riders help your clients get more

• Short Term Riders enables you to program around
  existing coverage either Group LTD or even
  other individual or association coverage
• If the existing coverage starts after the
  MassMutual policy, consider using the STR to
  provide a higher benefit for the full benefit
  period

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Any questions?