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Disability Insurance

May 23, 2017
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May is Disability Awareness Month

2 of the biggest myths about Disability

  • That it doesn’t happen to younger people
  • It is the result of work related accidents


Over 1 in 4 of today’s 20 year old’s will become disabled before they retire

90% of disabilities are caused by illness and 10% are work related

The number of mental nervous disorders and cardiovascular related disabilities is the same about 9.8%

Actual Claims Paid

Occupation      Gender    Age Policy Issued    Age at Disability Claim Onset    Diagnosis

Surgeon            M                         31                            33                                         Bacterial meningitis

Attorney            M                         32                            34                                         Skull Fracture

Dentist              F                          35                            36                                         Malignant breast tumor

Accountant       F                          35                            37                                         Carotid Artery Dissection

Dentist              F                          39                            42                                         Multiple sclerosis

Manager          M                          38                            42                                         Myeloid leukemia

Executive        M                           40                            44                                         Lung disease

Radiologist      F                            42                            47                                         Malignant breast tumor

Obstetrician     F                           45                             48                                        Colon cancer

Bus. Owner     M                          44                             49                                        Parkinson’s disease

Orthodontist    M                          43                             49                                       Stroke

Optometrist     M                          53                            56                                        Stroke

Alternate sources of Income

1)Personal Savings

If you saved five percent of your income each year, a six-month disability could wipe out 10 years of savings. Considering that the average long-term disability claim duration is 2.6 years


Many claim applications are denied due to the stringent requirements. After all appeals, only about half of claims are ultimately approved. Even then, the average monthly benefit paid, which may be subject to federal income tax, is barely above the poverty line at $1,165.50

Group Long-Term Disability (LTD) insurance – Group LTD is a good foundation, however the need to supplement Group LTD is an important consideration. Here’s why: 

  • Group LTD does not cover bonus income or retirement contributions.
  • Benefits are generally taxed because coverage is employer-paid, significantly minimizing actual benefits received.

Group coverage is not individually owned (can’t be customized, can’t take it with you if you leave and can be cancelled at any time  by employer).

  • Benefit limitations placed on group can leave higher-paid individuals under protected.
  • DI helps keep income strong so your savings, your lifestyle and your future plans can remain on track.
  • Individual DI coverage is based on your income, not that of a collective group or Social Security level.
  • Individual DI policies can cover base salary, bonuses and retirement contributions.
  • Also, if you pay the premiums yourself, benefits are not subject to taxes.
  • Most individual DI policies come with fixed premiums and non-cancellable coverage.
  • individually owned DI is portable; if you change jobs or careers, you can take your coverage with you.

What to Look for in a Disability Income Policy

Disability income insurance (DI) can help replace your income if you become too sick or hurt to work. It provides a buffer against the unexpected.  Should disability strike, DI provides income that can be used to keep your household running as well as to help you adjust to your changed circumstances.


But before you go shopping for a DI policy, you need to know what features to look for to get income protection you can count on:


How Disability is Defined

The definition of Total Disability outlines what constitutes being totally disabled.

  • If a policy defines Total Disability as inability to return to work in any occupation, then it would typically pay benefits only if you were unable to perform any job, either your own or a job in a new field or occupation.
  • If the policy defines Total Disability as an inability to work in your own occupation, it typically pays benefits if you cannot perform the duties of the occupation you were engaged in prior to becoming ill or injured.


Coverage for a Partial Disability and/or Recovery

A policy's Residual Disability benefit provides protection in the event of partial disability or during a recovery period.

  • Typically payable in an amount that is proportionate to the loss of income suffered due to sickness or injury.
  • Supports your financial recovery while you recover physically.
  • Not available with most group plans.


Flexibility to Tailor Coverage to Your Specific Needs

Both now and in the future, options (also called "riders") like these let you:

  • Increase coverage as your income grows with no medical insurability requirement.3
  • Adjust benefits to help keep pace with the cost of living.
  • Safeguard retirement contributions.
  • Protect student loan payments.



Most professionals expect to change jobs or employers multiple times during the course of their career.

  • You can take individual DI coverage with you when you change jobs.
  • Group Long-Term Disability (Group LTD) plans typically are not portable.



To avoid the possibility of losing your coverage just when you need it most, choose a policy that's both non-cancellable and guaranteed renewable to age 65—with premiums also guaranteed until age 65.

  • With group or association group coverage, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or to a change in your health, it would be very difficult to qualify for coverage from another provider.



It's important to note that the cost of individual disability income protection is age-based, so you can lock in a lower rate by buying now while you're young and healthy.


You've made a significant investment of time and money to build your career with the promise of financial security and the other rewards your profession provides. But should you become too ill or injured to work, that promise evaporates. Contact a reputable DI insurance agent to ensure you have adequate protection for your greatest asset.


1 U.S. Social Security Administration Fact Sheet, October 2015.

2 Council for Disability Awareness 2014 Long-Term Disability Claims Review.

3 Restrictions and limitations apply. The amount of additional coverage available will be financially underwritten based on the amount of disability insurance you have or are eligible to receive, as well as your income at the time you apply.


Prepared by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and availability may vary by state. Optional riders are available for an additional premium.