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Disability Insurance Planning Issues & Solutions
|DISABILITY INSURANCE LAYERING DESIGN Your income allows for food, shelter, utilities, transportation, education, healthcare as well as the cost to maintain your lifestyle. Why don’t we all have significant disability insurance coverage? Disability insurance comes in all forms and sizes and having a “portfolio” of policies in many cases, is the preferred and most cost-efficient method. Your base layer of coverage should be group based. Most employer offer some form of employer paid coverage as well as some provide coverage to be purchased on a voluntary basis. These benefits can be designed to be income taxable or income tax free. In many cases, group long term disability programs are inadequate from a benefit and/or contractual provision point of view. Plan design should focus on you getting paid and not letting the insurer “off the hook.” The next layer of coverage should be individual coverage which should be guaranteed renewable and non-cancellable. Again, we don’t want to give the insurance carrier, “wiggle” room. Using layers of coverage guarantees that each sub-set population of a company is adequately covered. Additionally, blatant gaps are closed minimizing risk exposure. Additional articles on this topic are available at your request.