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Many
employees are covered by their employer’s group long-term
disability insurance. These plans protect 60% to 66 2/3% of
income up to a maximum monthly benefit. Unfortunately, as the
employer pays the premium for this coverage, the monthly benefit
is income taxable at claim time. As a result, a disabled employees
normally will take a 33% to 40% reduction in pay, or more.
Supplemental disability insurance is additional disability insurance
protection which is paid in addition to group insurance. The
income is received tax free, as long as the premium is being
paid by an individual. By adding supplemental disability insurance
to one’s group insurance, approximately 75% to 80% of after-tax
income can be insured. |
