Guardian Disability Insurance Brokerage

DISABILITY INSURANCE FOR CONSUMERS

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GUARDIAN DISABILITY INSURANCE INFORMATION

Disability Insurance at Work

Disability insurance planning is an often overlooked aspect of your life. Are you guilty of assuming that “you have it at work”?

There are two major types of disability insurance available to employees; group long term disability (LTD) insurance, and individual disability insurance. A group long term disability insurance plan typically is designed to replace 60% of base salary to a monthly maximum spelled out in the policy. A majority of group LTD plans on the market typically cover 60% of base salary to a maximum of $5,000 a month. Notice that bonus income, as well as commission income is often not covered.

Group long term disability insurance benefits are taxable to an employee if the employer was paying the premiums for the coverage. The only way to make up the lost taxes during a claim is to have purchased an individual supplemental disability insurance policy that layers on top of your group coverage before the claim ever happened. Having both group long term disability, and an individual policy allows you to have the maximum income replacement available during a claim. It also gives you the power to know that if your employer ever dropped the coverage, or you ever left your current position, that you would still have your own policy in-force.

Many people earning an income over $100,000 a year are severely underinsured when it comes to group LTD. Since the monthly maximum with group long term disability is often around $5,000 a month, any income over $100,000 a year should be insured with individual disability insurance in addition to the group plan.

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Call 888-513-2300

Shortfalls of Group Long Term Disability Insurance

Benefits are taxable if your employer pays the premium
More restrictive definitions within the policy
Many have a 2 year maximum on drug, alcohol, mental and nervous disabilities
No rate guarantees
Many do not cover bonus or commission income

Benefits of Individual Disability Insurance

Benefits are received to you tax-free if you pay the premium
More liberal definitions within the policy to pay you more money in more claims scenarios
Higher monthly benefits up to $15,000 for most occupation classes
Rate guarantees to age 65 or 67
Fully portable if you ever leave your current job
Guarantees your income protection for the rest of your working years on the coverage you have in force provided you pay the premiums or FIO if you financially qualify.

Strategy

We always recommend to people that they supplement their group long term disability insurance with a small individual policy. The individual policy will lock in your income protection for the rest of your working years assuming you continue to pay the premiums, and provide you with a higher income replacement should you ever experience a claim. Having both types of coverage takes you from living off of 40% of your income after taxes, to almost 70% of your income after taxes. An individual disability insurance supplemental plan is inexpensive, but gives you the comfort of knowing that your income will always be protected regardless of your employers plan, regardless of whether or not you ever leave your current job, and regardless of whether or not you ever have a change in health history.

	Individual Coverage	Group LTD
Liberal definitions, allowing more claims-paying scenarios.	Yes	No
Protects incentive income	Yes	Not Typically
Protects retirement savings	Yes	No
Tax-Free benefits	Yes*	Not Typically
Rates Guaranteed	Yes	No

* If premiums are paid by the insured.
** Twenty-four month mental and/or substance-related disorders limitation is included on all policies issued to anesthesiologists/anesthetists (MD or DO), emergency room physicians, pain management physicians, and nurse anesthetists. Limitation also applies to all policies issued in the states of California and Florida.

Request a Quote

Call 888-513-2300

Financial Balance Group LLC is a general agency of The Guardian Life Insurance Company of America, NY, NY. Guardian Disability Insurance Brokerage is the brokerage arm of Financial Balance Group LLC. Disability insurance agent information provided on this web site is for broker use only. For important information about the disability insurance products and insurers discussed on this page, as well as information concerning Guardian Disability Insurance Brokerage or the General Agency representing Guardian, please click here.
Copyright Steven L. Crawford (General Agent).

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