Have you been considering the benefits of disability insurance? Are you wondering if your situation is suited for an individual or group disability policy? Below, we explain the benefits of each type of policy so you can determine how much coverage you need to protect your future.
Group Disability Insurance
Employers sometimes offer group benefits to full-time employees that include group disability insurance. Group benefits generally cover up to 60% of your gross income to a maximum level amount. If your employer covers the insurance premiums, the benefits are taxable. However, if you quit or get fired from your job, you will likely lose your group disability insurance policy.
There are two types of group disability insurance policies:
- Short-Term Group Disability: This type of policy provides weekly benefits for employees with covered disabilities. These policies also cover injury, illness, pregnancy, and mental disorders. Most short-term disability insurance policies are cost-prohibitive to the individual. This is why it is sometimes better for an individual to take out a short-term disability insurance policy through their employer.
- Long-Term Group Disability: These policies cover claims for catastrophic injuries and serious illnesses that leave people disabled for long periods of time. These policies have an elimination period of at least 90 days. Most long-term group disability plans have benefit periods set at 2 years, 5 years, 10 years, or longer. If you pick a longer benefit period, you will have to pay a higher premium.
To determine which type of policy you need, assess your financial situation to see how long you could actually survive without your current income. You should also consider how much money you have saved in the bank and set aside for retirement. If you have a comfortable amount of money saved up, you might want a short-term benefit period to cover your risks.
Individual Disability Insurance
Even if you already have group disability insurance, you can also use individual disability insurance to supplement your other disability insurance policy. If your employer doesn’t offer group insurance policies, then you should seriously consider taking out an individual disability insurance policy to ensure you will have the funds to survive if you become disabled.
Are you ready to choose a disability policy that will protect your future? Then call Insurance Specialists, Inc. today at (888) 451-0883 to request your consultation with a member of our team.