Minimum Disability Benefits

[MortalityMan]

page 640 of group insurance (Bluhm) says:

Minimum Benefit

Rating adjustments are needed for non-standard minimum benefits. Social Security 'freeze' regulations prevent offsetting with Social Security cost of living increases, hence the minimum benefit does not have to consider the leveraging of Social Security offsets.


Anybody understand what's going on there?

[MATE Seminars]

Well, apparently the Group Insurance book doesn't first explain what a minimum benefit is, so it makes it difficult to put into context that statement.

But thankfully the Group Disability Insurance study note (GH-D101-07) explains what a minimum benefit is (page 7): "At times, a claimant's benefit can be reduced by offsets to the point where it may be zero or even negative. The minimum benefit feature in LTD contracts will pay a monthly benefit, typically $50 or $100, regardless of other income received by the claimant. STD minimum weekly benefits are typically $25 to $50."

Hopefully that definition of minimum benefits will give you the context needed to understand that statement from the Group Insurance book (although unfortunately neither source explains what is considered a "standard" minimum benefit provision, and what is considered a "non-standard" provision).

Mark Bird