Supplemental Disability Insurance
Supplemental Coverage To Pick Up Where Group LTD Is Lacking
Group long term disability insurance typically covers 60% of base salary to a monthly maximum benefit of $5,000 or $10,000. The actual policy definitions are typically more restrictive than an individual disability insurance plan, and if your company is making the premium payments for you than the benefits are taxable during a claim. So if you think that a policy that pays you 45% (60% minus taxes) of your income, with restrictive provisions and definitions, and does not allow you to take your disability income coverage to another employer is sufficient than you don't need supplemental disability insurance.
The rest of us should consider a supplemental disability insurance policy. This type of policy can increase your percentage replacement of income up from the actual 45% (60% minus taxes during the claim), can guarantee you the ability to have portable disability insurance, and can likely give you more comprehensive disability coverage.
A lot of group long term disability insurance plans have very restrictive definitions that define when an employee gets paid for a disability claim. Typically it is own-occupation for only the first two years in a claim, then changes to a gainful occupation definition of total disability. Typically a group LTD policy also has a limited partial disability benefit, and generally does not offer any inflation protection as well. If that is not enough of a reason not to rely on group long term disability insurance, also realize you cannot take your LTD coverage with you if you ever leave the company.
A supplemental disability insurance policy through Berkshire will have a more comprehensive definition of total disability, a significantly better residual disability rider, and can also help protect against inflation with the addition of an optional Cost of Living Adjustment Rider*.
One Major Reason Not To Rely On Group Long Term Disability Insurance
It is a huge mistake to think that you will always be insurable. You may not be able to obtain a supplemental disability insurance policy even now. This type of insurance is not something that is easy for everyone to get. You need to apply and the company will review detailed medical records making sure that you don't have a potential disability already. Even if you are perfectly healthy now, there is no guarantee that you will be a year from now. You could develop back problems, diabetes or some other condition that prevents you from getting a policy or complete coverage. Purchasing a supplemental disability insurance policy can guarantee you the ability to always have income protection no matter how much money you earn, what company you work for, or what medical condition you develop in the future. If you decide to request a supplemental instant disability insurance quote from our site, make sure that you put in the "additional information" section that you would like supplemental coverage.
*The benefit is not necessarily protection against increases in the cost of living.