| Many people who have group Long-Term Disability | | | | and thus will not truly be covered at 60%. Someone |
| insurance provided through their employer are under | | | | earning $150,000 per year will only have 48% of their |
| the impression that their income is properly and fully | | | | income covered, which will dwindle down to 35% once |
| protected. Although this is a nice benefit to have, group | | | | the benefit is taxed. Again this is an issue that many |
| Long-Term Disability insurance is usually not what | | | | people are not aware of, but can be severely |
| people expect it to be. | | | | affected by. |
| One of the most important parts of a Disability policy is | | | | The final concern with group Long-Term Disability |
| the benefit amount it will pay in the event of a claim. | | | | insurance benefits, for the purpose of this article, is that |
| With most group Long-Term Disability insurance plans, | | | | benefits can be offset by a number of other potential |
| the benefit will be 60% of a person's income, up to a | | | | Disability benefits. For example, group Disability benefits |
| maximum benefit of $6,000 per month. Occasionally | | | | will offset dollar-for-dollar with all family Social Security |
| there may be a maximum of $10,000 per month, but | | | | benefits a person qualifies for. Although Social Security |
| not generally. | | | | benefits are very difficult to qualify for, this can still be |
| There are three main concerns with group Long-Term | | | | a serious concern. Additionally, group Disability |
| disability benefits that the average person may not | | | | insurance may also offset with professional |
| know or think about. First of all, when group | | | | association Disability insurance. Essentially a person |
| Long-Term Disability insurance is provided by an | | | | could be paying for benefits that he/she may never |
| employer, the benefits are paid on a taxable basis. So, | | | | see. This issue may not seem terrible, but in the actual |
| although one may be under the impression that he/she | | | | event of a Disability, people cannot afford to lose the |
| is covered at 60%, in all reality it is much closer to | | | | additional benefits they may qualify for. Social Security |
| 45%. In the case of someone who qualifies for $5,000 | | | | benefits should be received in addition to Disability |
| of monthly benefit, if we assume a 25% tax bracket, a | | | | benefits, not be cancelled out by them |
| $5,000 monthly benefit will only end up creating $3,750 | | | | The solution to the gaps existent in group Long-Term |
| of income. Most people would not be able to survive | | | | Disability insurance is to supplement a person's group |
| with a shortage of income this great. Although many | | | | coverage with individual Supplemental Disability |
| people are unaware of this issue, it is an important | | | | coverage. It is a way of creating additional income that |
| point to consider. | | | | is paid tax-free and does not offset with other |
| Additionally, group Long-Term Disability insurance will | | | | benefits such as Social Security. A person's income is |
| always have a maximum for monthly benefits. In a | | | | his/her greatest financial asset, and should be |
| situation where the maximum benefit is $6,000, all | | | | protected as such. |
| employees earning above $120,000 will be capped off | | | | |