One of our partners was contacted and interviewed by Reuters regarding issues facing consumers in obtaining disability insurance coverage. In a subsequent article, published in the Chicago Tribune and elsewhere, our partner’s insight was provided regarding the benefits of purchasing individual disability insurance policies as opposed group insurance coverage.
As the article points out, private policies, purchased separately from or in addition to any coverage obtained through an employer sponsored plan, typically offer superior coverage and can provide tax free benefits (if the individual paid the premiums himself or herself). Benefits received under an employer sponsored plan are typically taxable as income (if the employer paid the premiums).
In addition to the tax issue, private (individual) policies have better coverage and usually do not provide limits for mental or psychological claims (typically group policies pay only 24 months of benefits for such claims while individual policies have no such limitation). As a strategy to obtain as much insurance as possible, one should consider purchasing as much individual coverage prior to obtaining group coverage because an insurer selling individual coverage will look at the amount of group insurance already in place when considering offering coverage under an individual policy. There are limits as to the amount of disability coverage that companies will offer in a private policy, but there may not be such limits in the issuance of group coverage. Thus, getting the maximum amount of available individual coverage first, if possible, is the best way to go.
Schwartz, Conroy & Hack is the premier disability insurance law firm in the United States. To see how we can help you, contact us.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack
800-745-1755
ESS@schwartzlawpc.com