Who are the IncomeAssure people?
Great American Insurance Company is the underwriter here, and its industry ratings suggest that it is healthy. SterlingRisk, a large insurance brokerage firm, is the administrator.
What if my employer has announced layoffs or buyouts?
Another catch. If it’s a layoff, you probably won’t be able to buy coverage, though it’s worth trying if the cuts are in a division other than yours. The application asks, point-blank, if your employer has “announced or implemented a plan or program of job reduction, reduction in force, or departmental or company restructuring.”
If your employer is offering buyouts, then you’re a lot like me, since my employer announced them as I was writing this column. Here, again, you’re probably out of luck, though IncomeAssure may allow you to buy in again at a later date.
Don’t lie. IncomeAssure has seen bursts of applications from certain employers before, and its staff can usually figure out why in about 10 seconds of Internet searching. If you are the subject of an investigation during the claims process or afterward, and it turns out that your employer had announced layoffs right before you bought a policy, you’ve probably committed insurance fraud (and IncomeAssure definitely will not cut you a check).
Could you pull the wool over everyone’s eyes? Sure you could. But it’s a risk, and it ruins things for everyone else. “If we took enough hits on the chin from chief financial officers of small companies, we might rate them differently, but we haven’t,” David Ferron, product management director at Great American, said of the sorts of people who might have precise knowledge of an employer’s plans. “If you have enough bad experiences with people who slip through the net, you build a different net.”
What if there was a recent acquisition announcement?
Mergers and acquisitions often come with layoffs on both sides, but it may take months for that to happen. If your company goes up on the block, there’s a chance that six months may go by before a buyer emerges, the deal closes and the restructuring happens. IncomeAssure does not ban people who are in this situation.
What if I just got a bad review?
If you did, you’ve got an elevated chance of losing your job in the next round of layoffs, but IncomeAssure won’t ask about that.
Does IncomeAssure use my race or age in underwriting?
No, but it makes sense to wonder, given how much discrimination exists in the workplace. Age comes up on the application, but IncomeAssure says it does not use the answer in the underwriting.
Will this business model work?
IncomeAssure has existed for five years, there are about 1,000 active policyholders and people have collected over $1 million in claims.
“It has been disappointing that we haven’t been able to find a cost-effective way to get the word out that this exists,” Mr. Sterling, SterlingRisk’s chief, said. It’s also understandable. If nobody is aware that something exists, it’s hard for people to find it if they don’t know to look for it in the first place.
Insurance agents generally don’t want to sell something unless it earns them a fat commission, something this product cannot pay because of its modest premiums.
Mr. Ferron said that claims have about matched the company’s predictions. “We’re in it for the long haul,” he added.
So are you buying a policy?
No. My family has some savings and a home equity line of credit.
But if I were the sole breadwinner? If I knew my extended family could not or would not help me out? If I was the type of person who could not sleep unless I had every possible coverage for any eventuality?
Then I would give this a close look, especially given that I work in an industry where layoffs and buyouts are a regular occurrence. And isn’t that most of us these days?
Correction: May 27, 2016
An earlier version of this article misstated the maximum amount that IncomeAssure would pay out to a person in New York who earns $100,000 a year. It would pay up to $12,876, not $25,000.