A common question people ask is, “What are the differences between individual and group disability policies?”
There are 4 key differences. First, group long term disability benefits are usually taxable income to the recipient. However, individual policy benefits are not taxable income.
Second, group policies do not contain the true specialty occupation definition of disability. In other words, they penalize you if you do, or possibly even if you could, earn income from another job. An individual policy can provide the true specialty definition, meaning you could work in another job without impacting policy benefits.
Third, group policies do not provide a recovery benefit. A well designed individual policy would provide a long-term recovery benefit.
This is a vital benefit as a large percentage of claimants recover and return to work, but their income often never recovers
And fourth, group policies can be changed, reduced, or even eliminated at any time by an employer without your consent. Bottom line, you’re not in control!
An individual policy can be noncancelable and guaranteed renewable.
This means you call the shots. The insurance company cannot change or alter any aspect of the policy without your approval.
Billy Gwaltney is a disability expert. If you would like him to help you obtain the best coverage, please call or text us at (704) 707-5788.
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