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What did I just sign up for? Understanding your group long-term disability plan - II

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What did I just sign up for_ Understanding your group long-term disability plan(1).png

Last week, we discussed how you should give yourself a round of applause if you decided to opt into group long-term disability coverage through your employer during this year's annual enrollment period.

We also discussed how many you might not notice anything dramatically different after taking this important step, and may even have questions about what it is you actually signed up for last month. In recognition of this fact, we started providing some basic background information on long-term disability insurance and will continue this effort today.

An important point to understand concerning group long-term disability coverage is that while most workplaces will either cover the entire amount of the premiums or share some of the expense with employees, others require employees to pay 100 percent of the premiums -- albeit at lower rates than would be paid through a private policy.

In case you were heretofore unaware that you would be required to pay some or all of the premiums for group long-term disability coverage through your employer, or are having second thoughts about costing your employer extra money for what you believe might be an unnecessary expense, consider the following before vowing to opt out come next December.

  • The Social Security Administration estimates as many one in four 20-year-old workers will become disabled and unable to work before reaching the age of 67.
  • While workers' compensation insurance will replace lost income resulting from a work-related injuries or illnesses, statistics show less than five percent of disabling conditions are actually work-related, and that as many as 90 percent of long-term disability benefits claims are related to non-work-related illnesses like cancer, COPD or lupus.
  • Purchasing long-term disability insurance coverage via the private market can prove to be an expensive proposition over the long run.

Here's hoping the foregoing discussion has helped clarify some things for you, the employee, regarding group long-term disability coverage. As a final point, always remember that you do have rights and you do have options if your benefits under the terms of this coverage are being unjustly denied by the insurer.

Source: Forbes, "5 myths about disability insurance," Ashlea Ebeling , September 24, 2013

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