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Group, Association, or Individual Disability Coverage?

Do you want to review your current coverage or look at your options?
Contact Isabel Kane at 813-289-3632 or ikane@westshorefinancial.com to schedule a complimentary meeting.


All long term disability policies are not the same. You might be thinking to yourself, “What do you mean?” Most people will be provided coverage by their employer or purchase coverage through an association. But do you truly know how these contracts work in comparison to an individual policy? 

There are many instances where people will check this box off and not realize the holes that could exist. So, lets breakdown some of the major differences between group or association coverage compared to an individual policy.

Group (Employer Provided) or
 Association Disability Coverage

Individual Disability Coverage

Eligibility:

No underwriting required for group. Associations might require underwriting depending on the coverage amount. 


Most people will automatically be approved for a certain percentage based on their salary.

Eligibility:

Medical underwriting is required. 


You must complete an application, medical exam, and submit financials to apply. This will determine what benefits you are eligible to purchase. 

What’s Covered:

Your base salary.


Any income above your base salary is not covered. This includes bonuses, production, and commissions.

What’s Covered:

Your base salary, production, commissions, and bonuses. 


If the company pays for your group disability, you can purchase individual to cover taxes and any additional income.

Taxes:

Disability benefit is taxable when the employer pays for coverage. 


Any premium that you pay will make that portion of the benefit tax free to you. If you pay for your group long term disability, the full benefit is tax free to you.

Taxes:

Disability benefit is tax free because the premiums are paid with after tax dollars. 


You have the option to pay the premiums before tax. This will make the future benefit taxable to you.

Getting Paid:

The elimination period (the time period you must wait before receiving your benefit) is most commonly already determined.


Most elimination periods are 90 or 180 days. Many will require for you to satisfy all days consecutively to be eligible to receive your benefit.

Getting Paid:

You have full control over your elimination period and can be chosen from 30 days up to 720 days. 


For elimination periods less than 180 days, they can be satisfied over a 210 day timeframe. 

Leaving Employers:

Most policies are not portable to other jobs or careers. 


Association coverage will transfer with you, however, there are limitations.

Leaving Employers:

After approved and you are paying for a policy, the coverage is portable anywhere.


If you decide to change jobs, roles, or even careers, the policy follows you.

Policy Changes:

The policy is cancellable. 


This means that the company or association could choose to stop offering benefits and your coverage will no longer be valid.

Policy Changes:

The policy is noncancellable. 


You have full control over the contract and the company cannot change or cancel the policy as long as premium payments are made.

Student Loan Repayment:

Group coverage does not provide student loan protection for repayment.


Some associations might offer certain benefits for repayment.


Student Loan Repayment:

There is a feature available that will help cover loan payments due to a sickness or injury and is available up to $2500 monthly for up to 15 years over your monthly benefit.


This article was written by Tom Seeko with Florida Veterinary Advisors.

Do you want to review your current coverage or look at your options?
Contact Isabel Kane at 813-289-3632 or ikane@westshorefinancial.com to schedule a complimentary meeting.


Tom Seeko and CJ Burnett are Registered Representatives and Financial Advisors of Park Avenue Securities LLC (PAS). 4200 West Cypress Street #700, Tampa, FL 33607. Security products/services and advisory services offered through PAS, a registered broker-dealer and investment advisor. Tom Seeko and CJ Burnett are a Financial Representatives of The Guardian Life Insurance Company of America, New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Florida Veterinary Advisors is not an affiliate or subsidiary of PAS or Guardian. PAS is a member FINRA, SIPC.