|
|
|
|
|
|
|
|
Individual Disability Insurance |
|
|
Individual disability insurance policies should be considered even when you have group disability insurance. Be sure to study your group policy carefully. We can help you review your group policy to identify any limitations and determine how much individual disability insurance should be considered. As discussed in Group vs. Individual Insurance, individual disability insurance policies have many advantages compared to group disability insurance. As some individual disability insurance policies offer benefits as short as two years (sometimes less), in a sense, you could purchase individual short term disability insurance. However, individual short term disability insurance probably does not make sense if the goal is income protection, which is the whole point of individual disability insurance.
Individual disability insurance is underwritten carefully because the better policies are non-cancellable and guaranteed renewable to age 65, which means that the insurance company can not increase the premium nor change the contractual benefits. The monthly benefit can be $15,000 or so (amounts of $25,000 are possible in situations where the employer pays for the policy in participation with group LTD). However, in order for one to get a benefit this large, one would need to have an extremely high income. For instance, Berkshire requires on its individual disability insurance polices an income of about $460,000 to qualify for a monthly benefit of $15,000. Keep in mind that this is a situation where the individual is buying the coverage and it would ordinarily be payable to him or her on a tax-free basis. Any cost of living riders purchased with the individual disability insurance policy would serve to increase that benefit over time. The $25,000 amount mentioned above on individual disability insurance policies is for an employer paid situation that would make the benefit taxable to the employee.
We believe that the real risk of disability is from injuries or illnesses that prevent one from working at their chosen profession for longer periods of time. For this reason, in most, if not all circumstances, we recommend individual long term disability insurance policies, not short term individual disability insurance policies.
|
|
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. |
|
|
|
|
|
|
|
