Supplemental Disability Insurance Policies

DISABILITY INSURANCE FOR CONSUMERS

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GUARDIAN DISABILITY INSURANCE INFORMATION

Common Scenario: Currently Working As An Employee

If your employer does not offer Group LTD, please follow this link.

Group long term disability insurance provided through your employer usually provides coverage based on your base salary. This coverage generally does not cover any bonus, or commission income that you derive through work. A typical group LTD plan would cover 60% of base salary to a maximum of $5,000 a month. Because your employer pays for this coverage, any benefits received to you would be taxed during a claim. What this means to you is best illustrated as follows:

Example

If you make $100,000 a year, your maximum monthly disability benefit is $5,000 a month. If you are hit by a car and disabled, you would receive $5,000 a month, which would be taxed at @ 35%. Now you are trying to live the lifestyle you had become accustomed to at $100,000 a year on a spendable income of $39,000 a year. We are assuming that there are no medical bills to deal with as well from this disability.

Solution

Purchase an individual disability policy that is designed to layer on top of your group long-term disability benefits through work. A layered plan is generally for a lower benefit amount, typically enough to make up the lost benefit to taxes. Because it is for a lower benefit, the premium is also lower. The benefits you get out of this plan are as follows:

Ability to have full disability coverage while on claim, and not suffer financial disaster.
You own an individual policy, and it is fully portable should you ever leave your current employer.
Should you leave your current employer, there are riders you can purchase to convert your group LTD benefits into a personal policy without health underwriting.

A Note From Us

We feel strongly about every employee owning his or her own disability plan. We have witnessed the horror stories from people becoming disabled having only group LTD. By having a personal policy you insure your income for the rest of your life. No matter where you work, in what occupation, or what you health is at the time. Your health will change over time, and eventually you may not be able to qualify for disability coverage. By purchasing coverage now, you will never have to worry about qualifying again 10 years from now when you change jobs, you could simply take your policy with you.

No Group LTD?

If you have no Group LTD then it is entirely up to you to protect your income through disability insurance. Disability insurance is designed to replace up to 60% of your income on a tax free basis should a sickness or injury prevent you from earning an income. If you would like to know some of the statistics about disability insurance then follow this link.

Changes In Technology

Changes in technology have increased your odds of becoming disabled. Accidents and illnesses that used to cause death have now become survivable. The advent of airbags in cars will help you to survive a head on collision, but the odds are that you will not walk away from these accidents. The odds of surviving cancer, heart attacks, strokes, and more illnesses have increased. But who will pay your income while you are going through treatment? A disability insurance policy will do just that.

Bills Continue

Monthly Expenses add up quickly during a disability claim. Your bills continue for your mortgage, food, utilities, etc…plus you need to add to them the new medical expenses that are derived from a disability. If you find it difficult to live within your income now, try living without for 6 months. There is a reason most of us don't take 6-month vacations: we can't afford to!

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Guardian Disability Insurance Brokerage is a general agency of The Guardian Life Insurance Company of America, NY, NY.
"Broker Guided Tour" for broker use only. Steven L. Crawford, CDM © Guardian Disability Insurance Brokerage, 2000.

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