Many employees are covered by their employer’s group Long Term Disability insurance. These plans protect 60% to 66 2/3% of income up to a maximum monthly benefit. However, if the employer pays the premium for this coverage, the monthly benefit is income taxable at claim time. As a result, a disabled employee normally will take a 33% to 40% reduction in pay, or more.
Supplemental Disability Insurance is additional disability insurance protection that is paid in addition to group insurance. The income is received tax free, as long as the premium is being paid by an individual. By adding supplemental disability insurance to one’s group insurance, approximately 75% to 80% of after-tax income can be insured.
Contact us to discuss your specific needs.