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Disability Insurance Companies |
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Disability Insurance companies offer two basic types of disability insurance. Group disability insurance (long and short term) is the first type. The second is individual disability income insurance. Some disability insurance companies offer both types while other disability insurance companies specialize in a specific type.
Disability insurance companies require little, if any, individual underwriting for group disability insurance. These plans offer relatively low premiums but the disability insurance companies that offer them can raise the premiums in the future. If you are entitled to receive group disability insurance at work or have it as a benefit, you may find that by having your company long term disability insurance (and company disability insurance short term) your ability to get an individual disability insurance policy is limited, subject to issue and participation limits. For more information, contact us.
A disability income insurance company (i.e. one that offers individual plans), can have its individual products made available to companies in the form of an executive carve-out. As discussed in Group vs. Individual Insurance There are many advantages individual disability income insurance has in comparison to group plans. If Human Resources executives or managers in a given company compare disability insurance plans, the benefits of individual plans should become obvious. This is not the same thing as comparing one group disability plan to another group plan. When managers of a company compare disability insurance plans that are group plans, the differences are not usually as great.
If you have group disability insurance, you will generally be taxed on the benefit if premiums are paid with before-tax dollars. For this reason, it may be preferable to pay premiums on an after-tax basis. The taxation of disability insurance is not a function of the disability insurance companies; it is a function of how premiums are paid.*
Disability insurance companies that offer any given company long term disability insurance can also provide both individual disability insurance and group products. However, individual underwriting may be required.
Due diligence is important for disability insurance companies. Be sure your company long term disability insurance (and even your company disability insurance short term) is offered by a reputable carrier. Any disability income insurance company should be carefully scrutinized, especially those offering non-cancellable and guaranteed renewable policies. Remember, these policies have fixed premiums so it becomes important to know that the company behind the policy is strong.
We can provide you with ratings information on nearly all domestic disability insurance companies.
* Disabilty-Insurance.com does not provide legal or tax advice. Please contact your tax professional for specific tax advice.
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Policy Forms 0100, 1100 and 2100 are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly-owned stock subsidiary of The Guardian Life Insurance Company of America ("Guardian"), New York, NY. Policy Forms NC111 and NC112 in CA are provided by Guardian. Product provisions and features may vary by state. |
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