Long-Term Disability Insurance

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Joined: Wed Nov 09, 2016 11:53 am

Long-Term Disability Insurance

Post by cdancer85 »

I am currently shopping for LT disability insurance for myself. I originally was going to apply for coverage through the American Insitute of Certified Public Accountants (AICPA) as their rates seemed very attractive. However, after more research, I am starting to understand that this plan is missing some important features. I kept seeing recommendations for Guardian as a provider. I received a quote on their website of an estimated monthly cost of $154. Then I noticed that the Florida Insititute of CPAs (FICPA) offers a LT disbility insurance program through Guardian and the quote I received from their website for the same terms was only $26.40. The FICPA plan would be the obvious choice, right? Or am I missing something here?

This is the blurb from the FICPA's website:

Long Term Disability Insurance
The FICPA provides a Long Term Disability Insurance program through Member Benefits, Inc. Members can request information on a Member Group Disability insurance plan that provides monthly income in the event you become totally disabled as the result of a covered accident or illness (including pregnancy). Coverage underwritten by Guardian Life Insurance Company of America, a disability insurance industry leader with an AM Best rating of A++ (Superior) as of March 2012.

Guardian Insurance

Features that work for you

Up to $10,000 of monthly disability coverage*
Own Occupation Definition of Disability
Special group rates CPA/Accountants.
Fast Underwriting- most applications approved or declined within 2-3 weeks
No medical exam typically required to apply**
No Annual Policy Fee
Your Choice of Maximum Payment Period and Elimination Period
Optional COLA and Critical Disability Benefits
Residual Disability Benefit
Waiver of Premium and Waiver of Elimination Period Benefits
Posts: 81
Joined: Wed Mar 14, 2012 11:48 am

Re: Long-Term Disability Insurance

Post by Snezz1e »

I don't think the FICPA plan is something you should get since it only covers Total Disability not partial. I think any disability plan you buy should include partial disability coverage. The "Residual Disability Benefit" feature they state is not really partial disability coverage. Its return to work coverage which allows you to slowly return to full time (after having total disability) and they supplement you part-time income to bring it up to 100% for up to 12 months. It doesn't apply if you are only partially disabled and never fully disabled. Also don't forget to factor in cost of FICPA membership dues which works out to about $20-$30/month.

What important feature is the AICPA Disability plan missing? I have the plan. Only negative I see with plan is they limit payout for mental illness to only 5 years. Most of the criticism I've seen were when they only offered a full disability plan and people were saying it didn't cover partial disability. That is no longer an issue with their partial disability coverage. AICPA dues is only about $25/month but I also use their Umbrella and GVUL Insurance.

It is hard to do a comparison without getting the full policy contract for each plan you're considering.

One thing to note is that the premiums for a plan direct from Guardian is guaranteed for life. The rates for FICPA/AICPA change based on you age. See rate table for AICPA plan here (https://www.cpai.com/getmedia/cd0c16c1- ... -Rates.pdf). The rates in the tables are also not guaranteed. You can see what rates were back in 2014 here (https://forms.cpai.com/pdfs/6101%20LTD% ... et-NEW.pdf)

As for Guardian vs. AICPA. For 34 year old. $5k in coverage with COLA/Partial Disability coverage with Guardian is $128/Month. AICPA starts at $45- and increases to $105 over time ($40-94 if you factor in expected premium refunds). It works out to about $80/month if you retire sometime between 60-65. Based on getting a Guardian quote 10 years ago some differences are. Guardian partial disability is 15% loss in income while AICPA is 20%. AICPA provides benefits up to 67 while guardian is 65 (67 is an available option for higher premium). Guardian covers mental illness fully vs. 5 years on AICPA. Guardian COLA is 3% fixed while AICPA is half of CPI. Guardian is better in most areas but I don't think it is worth the $48 extra each month. Plus I like the fact that AICPA cost is lower at first so there is a time value of money benefit there.

Another thing to consider is if you have any work related disability coverage. AICPA allows you to buy up to $5k without factoring in any other coverage you may have. Guardian factors in other coverage from the beginning. As a government employee I get 60% coverage first year and 40% after in disability. As a result of that Guardian was only willing to sell me $1k in coverage max. AICPA won't have that limit. FERS/AICPA combo will actually provide 120% income replacement first year and 100% after for me personally and based on policy language they can't reduce it.
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Re: Long-Term Disability Insurance

Post by Rex66 »

Guardian is mentioned in a positive manner for individual disability insurance. Group insurance is always inferior (and cheaper).
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