Many employers offer employees a group insurance policy as part of their compensation package; these policies typically provide some kind of long-term disability (LTD) coverage. I have written in the past about the importance of fully understanding your LTD policy, as well as understanding your policy’s specific definition of disability.
While it is good to have LTD insurance through a group policy with your employer, there are many scenarios in which it may be beneficial for you to also purchase an individual insurance policy for yourself.
What Are the Benefits of Privately Purchased Long-term Disability Insurance?
- Your Individual Policy Is Portable
When you purchase individual LTD insurance, you own it. As long as you continue to pay the premiums, it will follow you regardless of your job. Conversely, a group insurance policy is tied to your employer; if you switch jobs or become self-employed, you will lose the coverage provided.
- You Can Purchase an Individual Policy while You Are Young and Healthy
This benefit is related to the one above. If you decide to start your own business at age 40 and you have never purchased an individual LTD policy, you will have to pay premiums based on your current age and health if you want coverage.
However, if you get an individual insurance policy when you are young – before you think you need it – your age and health at that time will determine the premiums. Since the plan follows you as long as you continue to pay into it, your rates will be much lower than the person who starts their policy at age 40 or 50.
- You May Be Able to Receive Multiple Benefits If You Acquire a Disability
Although group disability policies often offset against certain programs such as workers’ compensation benefits, they rarely offset against benefits from individually purchased disability policies.
This means if you acquire a disability, you may receive more benefits in total if you have group and individual policies.
- Your Individual Policy Can Fill In Coverage Gaps in Your Group Policy
Sometimes, group disability policies lack important features, such as short-term disability coverage. Short-term disability coverage provides funding during the intervening time between when you acquire the disability and when the long-term disability benefits begin (this could be 90 days, 120 days, 6 months, etc.).
Having an individual LTD policy will ensure you are prepared and have adequate coverage to rely on if you acquire a disability, whether you are currently covered under a grouppolicy or not.
Roger R. Foisy is an experienced long term disability lawyer in Ontario who helps clients receive the long term disability compensation they deserve. Contact Roger and his team today for immediate support and a free consultation.
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