Voluntary supplement to long-term disability insurance now available

Iowa State employees can now take advantage of a group discount to purchase voluntary individual disability income insurance to supplement their ISU-provided long-term disability coverage. The university benefits committee reviewed the program, which is underwritten by Principal Financial Group, and recommended its introduction for this academic year.

Disability income policies are designed to boost the monthly payments an employee receives if disabled, increasing the amount closer to the recipient's prior salary. The long-term disability insurance that covers all Iowa State employees after a year of employment pays 63% of the budgeted salary of a disabled employee, and those payments are taxable income.

Because standard long-term disability policies only cover a portion of pre-disability salary and taxes reduce take-home pay even further, many employers offer supplementary income protection coverage, said Ed Holland, benefits director for university human resources.

The voluntary coverage isn't subsidized by Iowa State, and the premiums can't be paid with automatic ISU payroll deductions used to cover optional benefit offerings. Personalized premiums -- which vary based on salary, coverage amount and other factors -- reflect a negotiated discount offered to ISU employees but are paid directly to Principal, the company offering the plans. Principal also carries Iowa State's base long-term disability plan and its employee life insurance policies.

Because the disability income insurance plans are offered directly through Principal, the policy can continue even if an employee no longer works at Iowa State. Employees can elect at any time to add, drop or change the coverage, but evidence of insurability may be required.

Employees interested in disability income insurance should contact Rick Cordaro (800-210-5529, ext. 1, or Cordaro.Rick@principal.com). Principal representatives also plan to hold informational sessions on campus soon. Human resources service delivery teams will share building-specific schedules for those meetings.