Group Disability Insurance:
Long Term Disability Insurance is one of the most important insurances that everyone should have if they are receiving an income. The one question to ask yourself is "How would I pay my monthly bills if my income were to stop do to an injury or an accident?"
Long Term Disability usually begins after a 90 day waiting period. The best plans would pay benefits up to a person's normal retirement age. If coverage is desired for shorter periods then a short term disability policy could be added.
Most group DI policies would cover up to 60% of the individual's current salary up to a monthly maximum. If the employee pays the premiums the benefit when received would be tax free. If the employer pays the premium the benefit would be taxable as income.
Individual Disability Insurance:
An Individual DI policy is better than a group policy because it stays with the employee. If someone changes jobs the DI policy would stay with them. The underwriting is more detailed for an individual policy and doctor's records are usually requested. It is best to get a policy issued at a younger age when health is usually better, however, as one increases their income a review of the DI coverage should take place to insure that the proper coverage is in place. It is usually best to purchase an additional policy rather than replace an existing policy.
The rate class for Disability Insurance is based on the type of job and level of responsibility. For instance: An office employee would be at a better risk class than someone that drives for a living, or is a roofer do to the decreased possibility of becoming disabled.