Disability Income Insurance

Protecting your income is a good decision

Many people, like you, understand how valuable income is. In its most basic form, income provides money for shelter, food, and clothing. But our income, as we all know, is anything but ‘basic.’

Your income isn’t just a paycheck. It’s usually the primary source of funding for every part of your life. Expressed another way, your income — when viewed over your entire career — is often your single, most important asset.

Beyond The Basics

But beyond the basics, have you considered everything that your income funds? Taking the time now to understand just how valuable your income is, is the essential first step in identifying not only your current needs, but your long term goals. A simple way to accomplish this is to divide your life into four parts: Self, Family, Community and Career. Begin to identify everything your income funds in each area and, as an upside, simultaneously get a better idea of what is truly important to you.

How secure is your income?

We put many plans in place to ensure we protect what is most important to us.

Now that you know just how valuable your income is, are the plans you have in place already — specifically the group long term disability insurance coverage you may have through work — adequate to protect your most important asset?

Group Long Term Disability

Group Long Term Disability (GLTD) coverage through your employer replaces a portion of your income should you become too sick or hurt to work. GLTD coverage is usually included as part of an employee benefits package, and in many instances, the premiums are paid for by the employer. A typical GLTD policy will replace about 60% of the insured base salary, up to a specific maximum benefit limit, such as $5,000 per month.

In addition to monthly ‘caps’ on benefits payable:

• GLTD traditionally only covers base salary; bonuses and commissions are often excluded from GLTD benefit calculations.

• GLTD benefits are subject to income tax when the premiums are paid for by the employer. Many of us are unaware of these limitations in a GLTD plan. The monthly caps, exclusion of bonus or commission income, and taxable disability benefits can make the actual GLTD benefits available much lower than you might realize.

Other limitations of GLTD are:

• Coverage may not be portable or available at the same rates if you change jobs or become unemployed.

• Because of ‘caps,’ GLTD may cover a lower percentage of income for those who earn higher salaries.

The DI Gap

The limitations of GLTD coverage all contribute to the ‘DI Gap’ — the difference between your current net income and the net GLTD benefits you would receive if you were to become too sick or hurt to work for an extended period of time. Understanding the level of coverage provided by your GLTD plan is essential in accurately determining your DI Gap. Be sure to refer to your GLTD plan document. You might be surprised to discover that you have a DI Gap.

How can you help reduce the DI Gap?

To reduce the DI Gap, a cost effective approach is the purchase of an individual disability income insurance policy. An individual disability income insurance policy can cover a portion of your earned income if you become too sick or hurt to work. The very income you rely on for the things that matter most to you and those you care about.

Secure a larger portion of your income

Individual disability income insurance (DI) is a personal protection solution available to you that, when used to supplement your employer provided GLTD, can help replace a larger portion of your income* — including bonuses or commissions. While no disability income insurance policy, or any combination of policies, will cover 100% of your income, adding DI coverage to supplement existing GLTD coverage can help you minimize the DI Gap. DI can provide you additional benefits to help fund your expenses and lifestyle if you become too sick or hurt to work.

A DI policy:

• Can be used to supplement existing GLTD — and increase overall protection.

• Can cover bonuses and commissions (not typically included in GLTD coverage).

• Offers benefits that are usually tax-free.

• Is fully portable; you own it and can take it with you wherever your career may lead.

• Is non-cancelable to age 65. The premiums will not change (provided coverage is not increased), and the contract can not be canceled by the carrier except for lack of timely premium payments.

• Can provide recovery benefits when you return to work.

• Can provide benefits to help you pay expenses, such as mortgage, credit card or car payments, or save for retirement.

• Offers a wide selection of policy features and benefits to help meet your unique and changing needs. Your income is the foundation of every financial strategy you put in place. Without it, your plans may be put in jeopardy. Your income is that valuable.

Our Financial Advisors can help you assess your situation, and make recommendations for a disability income insurance solution. We can help you build upon what you already have in place, and help ensure that your most important asset is as secure as it can be.

*This supplemental individual disability income insurance does not coordinate with your group long term disability coverage.  Claim decisions are rendered independent of each other.


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