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

Rhode IslandNew YorkNew JerseyHawaiiCaliforniaPuerto Rico

Effective July 1, 2002Massachusetts Mutual Life Insurance CompanyAnd 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 = $1,584NJ = $1,776NY = $ 680PR = $ 452RI = $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?