DO YOU KNOW WHAT IS COVERED ON YOUR EMPLOYER-PROVIDED DISABILITY BENEFITS?

Hi, this is Matthew Kryder, an insurance advisor with Petschauer Insurance. Last month we discussed the importance of protecting your future income with disability insurance, which replaces your income in the event you have an injury or illness and are unable to work. For most Americans, the sole source of disability coverage is provided through their employer. However, we find most people have no idea if the benefit’s available and if it is, they have no idea what the coverage entails. So today we’re going to shed some light on employer-provided disability benefits. Basically, there are two types, short-term, and long-term disability. Short-term disability pays a percentage of your income for a limited amount of time, usually three or six months. If you’re still disabled and the short-term disability ends, the long-term disability kicks in and also pay you a percentage of your income. However, you should know that employers are not obligated to provide long-term disability benefits, and sadly most do not.

If you do have access to this benefit, it is a great benefit to have. However, you should be aware of some significant limitations of this coverage. Five reasons why your group’s long-term disability benefits are limited. One, the benefit is capped. Two, the benefit is usually taxed. Three, how long it pays is limited. Four, how the policy defines disability may determine whether or not you’re even eligible for the benefit, and five, the benefit is not portable, meaning if you were to leave your employer that benefit goes away.

So, what can you do? Give us a call. We’ll be happy to review your employer’s benefits. If there are any gaps in coverage, we can look at reviewing options to cover your most valuable asset, you. Stay tuned for next month when we discuss the common misconceptions with social security and worker’s compensation benefits.