I have Disability Insurance at work. What s the difference between individual and group coverage?
There are two major types of disability insurance available to employees; group long term disability (LTD) insurance, and individual disability insurance. A group long term disability insurance plan typically is designed to replace 60% of base salary to a monthly maximum spelled out in the policy. A majority of group LTD plans on the market typically cover 60% of base salary to a maximum of $5,000 a month. Group long term disability insurance is taxable to an employee who goes on claim assuming the employer was paying the premiums for the coverage. The only way to make up the lost taxes during a claim is to have purchased an individual disability insurance policy that layers on top of your group coverage before the claim ever happened. Having both group long term disability and an individual disability insurance policy allows the you to have the maximum income replacement available during a disability insurance claim. It also gives you the power to know that if your employer ever dropp
