Help with Disability Income needs

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jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

Help with Disability Income needs

Post by jerome99 » Thu Jun 04, 2015 9:42 am

I am reviewing the amount of disability coverage I need as my income has increased over the last 3 years.

My current coverage is outlined below.

Employer provided Short term (13 weeks)- $1,600 monthly benefit- 1 week elimination period
Employer provided Long term (to age 65)- $5,000 monthly benefit- 90 day elimination period
Individually purchased Long Term (MetLife- own occ policy) (to age 65)- $10,200 monthly benefit- 180 day elimination period

My current gross income is $29,000/month and $17,300 net. It is my understanding that the employer provided benefits will be taxable and my MetLife benefits will not- can anyone confirm? If this is true, my monthly benefit is around $14,000, correct?

Also, based on my gross and net figures what amount of insurance do I need to purchase today?

jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

Re: Help with Disability Income needs

Post by jerome99 » Fri Jun 05, 2015 5:19 am

Any help?? Thanks!

wfrobinette
Posts: 727
Joined: Fri Feb 20, 2015 3:14 pm

Re: Help with Disability Income needs

Post by wfrobinette » Fri Jun 05, 2015 8:51 am

jerome99 wrote:I am reviewing the amount of disability coverage I need as my income has increased over the last 3 years.

My current coverage is outlined below.

Employer provided Short term (13 weeks)- $1,600 monthly benefit- 1 week elimination period
Employer provided Long term (to age 65)- $5,000 monthly benefit- 90 day elimination period
Individually purchased Long Term (MetLife- own occ policy) (to age 65)- $10,200 monthly benefit- 180 day elimination period

My current gross income is $29,000/month and $17,300 net. It is my understanding that the employer provided benefits will be taxable and my MetLife benefits will not- can anyone confirm? If this is true, my monthly benefit is around $14,000, correct?

Also, based on my gross and net figures what amount of insurance do I need to purchase today?
I swear I replied to this yesterday.

1. If you are paying for disability after tax it should be tax free.
2. I dislike employer group plans because they generally do not cover same occupation. If you can work as a wal-mart greeter they stop paying so I take this number into account for catastrophic disability.
3. Yes you have about 14k in benefit now. but only 10,200 of it is guaranteed for own occupation.
4. IMO, you should have enough disability to cover your net take home pay + any pretax retirement contributions.
5. Only you can decide what the right amount is based on the risk you want to assume.

How close are you to retirement? How much do you have saved already? Do you have a working spouse? Does your plan have a future increase option without medical underwriting?

Personally, I'm in the same boat as you and will be upping my personal plan to the max benefit allowable based on my income on my policy anniversary date. I'm the only breadwinner in the family so I want to eliminate as much risk as possible.

ralph124cf
Posts: 2059
Joined: Tue Apr 01, 2014 11:41 am

Re: Help with Disability Income needs

Post by ralph124cf » Fri Jun 05, 2015 9:15 am

With your current income and coverage, you are close to the max disability coverage that most insurance companies will write. Most will not exceed 60-65% due to moral risk--that is they don't want disability to be too attractive an option.

Ralph

wfrobinette
Posts: 727
Joined: Fri Feb 20, 2015 3:14 pm

Re: Help with Disability Income needs

Post by wfrobinette » Fri Jun 05, 2015 10:28 am

ralph124cf wrote:With your current income and coverage, you are close to the max disability coverage that most insurance companies will write. Most will not exceed 60-65% due to moral risk--that is they don't want disability to be too attractive an option.

Ralph
60% of his monthly income is 17,400 he's covered at 14000. Still has 3400 to go.

Broken Man 1999
Posts: 1570
Joined: Wed Apr 08, 2015 11:31 am

Re: Help with Disability Income needs

Post by Broken Man 1999 » Fri Jun 05, 2015 10:55 am

I can't help you with the amounts you might need, but I can give you my opinion about MetLife as a LTD provider.

With an LTD policy as well as an LTC policy, the company has paid out over a million bucks thus far. Once approved, never had any issues. Each year I have to fill out a form stating I haven't had employment, and my doctor certifies there has been no change in my condition. My doctor doesn't even charge for filling out my form.

Approval for MetLife and SSDI was completed together, as the policy required you applying for SSDI benefits. I had the checks start being deposited right around 6-7 months after my accident. Same with SSDI benefits.

Honestly, I can't think of any problems/issues/concerns I have had since they started paying in 1999.

FWIW, I get a discount on my MetLife auto insurance because I have other policies with MetLife. Seems strange they would give a discount while they are paying out on another policy.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

BruDude
Posts: 2807
Joined: Thu Dec 30, 2010 12:28 am
Location: Las Vegas

Re: Help with Disability Income needs

Post by BruDude » Fri Jun 05, 2015 11:24 am

jerome99 wrote:I am reviewing the amount of disability coverage I need as my income has increased over the last 3 years.

My current coverage is outlined below.

Employer provided Short term (13 weeks)- $1,600 monthly benefit- 1 week elimination period
Employer provided Long term (to age 65)- $5,000 monthly benefit- 90 day elimination period
Individually purchased Long Term (MetLife- own occ policy) (to age 65)- $10,200 monthly benefit- 180 day elimination period

My current gross income is $29,000/month and $17,300 net. It is my understanding that the employer provided benefits will be taxable and my MetLife benefits will not- can anyone confirm? If this is true, my monthly benefit is around $14,000, correct?

Also, based on my gross and net figures what amount of insurance do I need to purchase today?
Yes that is correct, your employer coverage will be taxable if the employer is paying the premium, assuming they haven't set up a separate program where you pay the tax on the value of the premium to make the benefits non-taxable. Is the $29k/month your earnings as a W2 employee, or are you earning that much as a 1099 contractor and then writing off enough expenses that it comes down to $17.3k?

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