Why Group Disability Insurance is not Adequate Protection.
Although many group disability plans are free, they have many drawbacks. In this case “FREE” does not equate to good or even proper protection. Relying solely on group disability benefits to protect your occupation and future can put you in an extremely dangerous situation. Consider the following:
- Group policies do not offer true own occupation protection. If you’re disabled and get a new job the new income will lower or eliminate your benefit from the group policy.
- Group policy’s do not protect your future earnings.
- Group policies are not portable. You cannot take them with you when you change jobs.
- Definitions of group contracts are not as liberal as professionally designed Individual Disability Income Protection
- Benefits of group policies are taxable when your employer pays the premiums
- Benefits of group policies are offset by any social security and workman compensation benefit you receive.
- Benefits are based on a percentage of salaried income. (Bonus’ and Commissions are typically not covered)
- No rate guarantees, meaning your premiums can increase
- The policy can be changed or canceled by the insurance company or your employer at any time.
Group Protection is no substitute for Properly written Individual Disability Insurance and should only be considered as a complement to personal Policies.