What Is Disability Insurance?
If you were to suffer a disability, illness or injury, would you still be able to maintain your lifestyle without earning an income? Your ability to earn an income is your most valuable asset. Expenses continue even if you are unable to work, so it’s important to plan in the event of a disability. It’s important to research disability protection, so you can make an informed decision if individual coverage makes sense for your situation.
Individuals can receive disability coverage through many avenues, such as individual plans, employer-sponsored long-term disability (LTD) plans, association plans, social security disability benefits, etc. The differences between these plans can be tremendous, which is why we provide specialized planning solutions tailored to your needs and goals, so you can make an educated decision with the help of our website.
Excluding benefits received through various state and federal programs, such as Worker’s Compensation and Social Security Disability Benefits, the following list provides an overview of individual and group/association coverage for professionals.
- Individual Coverage
Individual coverage tends to offer the most comprehensive benefits. For this reason, coverage tends to cost more than group long-term disability (LTD) or association plans. These policies can be specifically designed to meet the needs and goals of the professional to make sure his/her income is fully protected. We can help differentiate the differences between companies and develop a policy that is most beneficial to your situation. If you have existing group LTD or association coverage, we are happy to evaluate that plan to maximize your coverage.
- Group Long-Term Disability (LTD) Coverage
Employers may offer employees group long-term disability (LTD) coverage as part of an employee benefit package. For a professional this benefit tends to offer the least comprehensive coverage compared to individual and association plans. For example, a policy may cover 60% of base income up to $10,000 per month. Depending on the arrangement the employer or employee may pay for the coverage. When the employee pays for coverage, it tends to be extremely affordable. If the benefit is employer-paid, then the benefit is taxable to the employee if he/she ever becomes disabled. In addition, for higher paid employees, especially with large bonuses or commissions, there may be a chance the maximum monthly benefit is not sufficient to maintain their lifestyle if disabled. In addition, if an employee leaves the company, the LTD plan may not be portable.
- Association Coverage
Many professional associations offer its members disability coverage as a benefit of being affiliated with the association. Some association plans will resemble group LTD policies, where others will be closer to individual policies. Cost is usually more expensive than group LTD coverage, but less expensive compared to individual policies. However, these types of plans can be missing key features that a typical professional wants in a policy.