Disability Insurance

Combining Group and individual disability insurance

How can you combine individual and group disability insurance, to maximize disability income for higher earners?

Combining individual and group disability insurance is a strategy that can help maximize disability income for higher earners. Here are some ways this can be accomplished:

  1. Coordinate benefit payments: Many group disability policies have a coordination of benefits provision that limits the amount of benefit payment to the employee’s pre-disability income. By coordinating benefit payments with an individual disability insurance policy, a higher earner can receive a higher overall benefit payment.
  2. Fill gaps in coverage: Group disability insurance policies may have exclusions or limitations that are not present in individual policies. By purchasing an individual policy, higher earners can fill these gaps in coverage and receive a more comprehensive disability insurance plan.
  3. Increase benefit amounts: Individual disability insurance policies can offer higher benefit amounts than group policies. By purchasing an individual policy with a higher benefit amount, higher earners can increase their overall disability income.
  4. Customize coverage: Individual disability insurance policies can be customized to meet the specific needs of the higher earner. For example, a policy may be designed to cover the particular risks associated with their profession, or to provide additional benefits such as cost-of-living adjustments.
  5. Tax efficiency: Benefit payments from group disability insurance policies are typically taxable, while benefit payments from individual policies are generally not. By combining group and individual disability insurance, higher earners can maximize their disability income while minimizing the impact of taxes on their benefit payments.

Overall, combining individual and group disability insurance can be an effective strategy for higher earners to maximize their disability income. By coordinating benefit payments, filling gaps in coverage, increasing benefit amounts, customizing coverage, and achieving tax efficiency, higher earners can design a disability insurance plan that meets their specific needs and provides them with the financial protection they need in the event of a disability. Interested in learning more?  BenefitsDNA can help, contact our team today to get started!

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