Group Disability insurance through your employer is a great start, but the amount of your income protected, the monthly benefit amount and length of coverage may not be sufficient for your needs. A typical group plan will replace up to 60% of your salary. Supplemental plans and individual policies will often cover up to 70% or 80%. Few plans will cover all of your salary for fear you will have little or no incentive to get back to work.
To be eligible for Social Security benefits, the disabling condition must be expected to last for at least 12 months, or be a terminal condition. There are other eligibility factors as well.
Most policies let you arrange a waiting period of 60, 90,180, 365 or 730 days (available in most states). For example, if you choose a 90-day elimination period, benefits will begin to accrue after your 90th day of disability. Also, you can select to receive benefits for a maximum benefit period of 2 years, 5 years, to age 65 or to age 70. (Not all benefit periods are available for all occupational classes. Ask your representative for complete details).
If your residual (partial) disability causes you to lose at least 20% of your earnings, with the optional Residual Disability Rider you may qualify for a partial benefit. Plus, you can also select the Residual Recovery Benefit, which allows you to continue receiving benefits for up to 24 or 36 months even after you return to work full time, if you continue to have at least a 20% income loss due to the disability that preceded your recovery.
If you decide to include the optional Cost of Living Adjustment (COLA) Rider with your policy, after being disabled for one year, and while your disability continues, your benefit may increase annually. Depending on which version of the rider you choose, increases range from 0% to 10% of your original monthly benefit, based on the Consumer Price Index (CPI-U), or at a fixed rate of 3% of your original monthly benefit.
With the optional Guaranteed Insurability Rider, you can buy additional coverage each year on the policy anniversary, without medical underwriting, subject to financial underwriting only, up until age 51. The amount your coverage can be increased is based on your yearly unit of increase, your available maximum total increase and our current financial underwriting rules at the time of the option. The premium rates for your additional coverage are based on your age, at the time of increase.