AIG Launches “Income PLUS” Disability Rider Offering Lump-Sum Benefit

NEPTUNE, N.J.--(BUSINESS WIRE)-- AIG Benefit Solutions, the group benefits division of American International Group, Inc. (AIG), has introduced Income PLUS, an innovative new rider to its Group Long-Term Disability Insurance that provides a one-time, lump-sum payment in the event of a disabling condition.

The Income PLUS benefit is unique in the industry as a lump-sum benefit that is not offset or negated by any other sources of income, and is paid in addition to the monthly benefits offered under the long-term disability product. The Income PLUS benefit can be used by employees as they see fit to help pay debt or medical bills or to provide a financial cushion during a period of disability.

Curt Olson, President and CEO of AIG Benefit Solutions, said the idea for Income PLUS came from research showing that a significant number of disabled employees face serious financial burdens by the time they get through their LTD elimination period, which is usually six months. While short-term disability helps cover some of the income shortfall during this period, employees who transition to long-term disability benefits often face higher debts by the time their LTD benefits begin.

“Income PLUS is an innovative and unique solution to the challenges these workers face from long-term disability, and offers additional financial security at a time when they may have problems paying their bills or meeting their financial obligations,” Olson said.

According to the Council For Disability Awareness, the average long-term disability claim duration is 31.2 months, and one in eight workers will be disabled for five years or more during their working careers. Sixty-five percent of working Americans say they could not cover normal living expenses even for a year if their employment income was lost; 38 percent could not pay their bills for more than three months.¹ (Source: The Council For Disability Awareness, “Disability Facts.” December 2011.)

The Income PLUS rider benefit is payable immediately after the 180-day elimination period is satisfied. It offers what amounts to 12 months’ worth of benefit at 10 to 40 percent of income, paid as a lump sum in addition to the monthly LTD payments. The percentage paid under the Income PLUS rider varies according to the rider option selected by the employer.

The total income replacement maximum available to employees is 80 percent, including the underlying LTD plan and the Income PLUS rider benefit. For example, if the underlying long-term disability plan offers 60 percent income replacement, then the Income PLUS Rider options are 10 or 20 percent.

So, for an employee earning $40,000 a year who is covered under a Group Long-Term Disability plan that offers 60 percent income replacement to a $6,000 maximum, if the employer selected a 20 percent Income PLUS rider, the employee would receive a lump-sum benefit of $8,000 after meeting the LTD elimination period of 180 days. The employee would also receive the LTD monthly benefit of $2,000 as long as he or she remained disabled under the terms of the plan.

Christine Latore, Director of Disability Product Management for AIG Benefit Solutions, noted the uniqueness of the Income PLUS rider allows employers to make their benefit offerings to employees more competitive. “Income PLUS can be a solution for the employer who is managing to a tight benefits budget but who wants to be able to offer employees solid coverage options," Latore said.

The Income PLUS Rider is available on the Group Long-Term Disability Insurance offered through AIG Benefit Solutions, which also offers a group short-term disability product and an individual short-term disability plan. Claim operations are at AIG Benefit Solutions’ Disability Service and Claims Center, a state-of-the-art center in Farmington, Conn. Other services offered through the Disability Service and Claim Center include family and medical leave administration (FMLA). Visit www.americangeneral.com/disability for more information about AIG Benefit Solutions’ disability products and services.

AIG Benefit Solutions’ Group Long-Term Disability Insurance products with the Income PLUS Rider option are available as both employer-funded and employee-paid plans.

AIG Benefit Solutions offers one of the industry’s broadest and most diverse portfolios of products and services, with solutions for companies and affinity groups of all sizes. AIG Benefit Solutions’ innovative products, which range from Stop Loss and Organ Transplant insurance to Group Life, Disability and Worksite products, form the basis of a portfolio that provides customers with unparalleled choice, flexibility and ease of implementation.

Policies issued by: American General Life Insurance Company of Delaware, Wilmington, Delaware, policy form number G-DIS-41000, rider form number G-DIS-41030; and The United States Life Insurance Company in the City of New York, New York, New York, policy form number G-DIS-31000, www.americangeneral.com/employeebenefits.

American General Life Companies, www.americangeneral.com, is the marketing name for the insurance companies and affiliates comprising the domestic life operations of American International Group, Inc., including American General Life Insurance Company of Delaware and The United States Life Insurance Company in the City of New York.

The underwriting risks, financial and contractual obligations and support functions associated with products issued by American General Life Insurance Company of Delaware and The United States Life Insurance Company in the City of New York are the issuing insurer's responsibility. The United States Life Insurance Company in the City of New York is authorized to conduct insurance business in New York. Policies are not available in all states.

About AIG Benefit Solutions

AIG Benefit Solutions is the marketing name for the domestic benefits division of American International Group, Inc. Underwriting risks, financial and contractual obligations, and support functions associated with products marketed by AIG Benefit Solutions are the responsibility of the underwriting companies, which include American General Life Insurance Company of Delaware* (Wilmington, DE), American General Assurance Company* (Schaumburg, IL), American General Indemnity Company* (Schaumburg, IL), American General Life Insurance Company* (Houston, TX), The United States Life Insurance Company in the City of New York (New York, NY) and National Union Fire Insurance Company of Pittsburgh, Pa., with its principal place of business in New York, NY. *These companies do not solicit business in New York.

About American International Group, Inc. (AIG)

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

AIG Benefit Solutions Linda Malamut, 310-772-6533
[email protected]

Source: AIG Benefit Solutions