Your paycheck is your biggest asset. Is it insured?
(941) 256-9114 · gala.s@capstanins.com
Florida Agency License #L132362
Disability
Your paycheck is your biggest asset. Is it insured?
What group coverage at work does, and doesn’t, protect.
You insure the house. You insure the car. You insure the boat, and around here that is not a joke. Now ask yourself what pays for the house, the car, and the boat.
It is your ability to get up and go to work. That is the asset everything else rests on, and it is usually the only one nobody thinks to insure.
This is not a rare event
Social Security’s own disability booklet says it plainly: studies show that a 20-year-old worker has a 1-in-4 chance of developing a disability before reaching full retirement age. Not one in a hundred. One in four.
And the picture people carry in their head is wrong. They imagine a fall from a ladder. The claims that actually come in are far more ordinary: back and joint problems, cancer, heart disease, complications from an illness that started as something minor. Things that do not make a story, and still stop you working for a year.
What your policy at work actually does
If you have long-term disability through an employer, you have something real, and it is worth knowing its edges. Group plans vary, so read yours rather than trusting any summary, including this one. But the common shape looks like this.
| Group plan at work | A policy you own | |
|---|---|---|
| How much it replaces | Typically around 60% of base salary | Set when the policy is written |
| Counts bonus & commission | NoOften base salary only | YesCan be written to your real income |
| Monthly cap | YesA maximum that quietly shrinks that 60% once you earn above a certain point | Sized to you, subject to underwriting |
| Is the benefit taxed | Generally taxable to you if your employer paid the premium, so 60% arrives smaller than 60% | Generally received tax-free when you paid the premium yourself |
| Waiting period | Often 90 days before anything is paid | Chosen when the policy is written |
| If you change jobs | EndsIt belongs to the employer, not to you | YoursIt moves with you |
| Definition of disabled | Often “any occupation” after a period | Can be written as your occupation |
Tax treatment is general information, not tax advice. Your own tax advisor should confirm how it applies to you.
The two that catch people
“Base salary” may not mean your income. If a meaningful part of what you earn is bonus, commission, or distributions from your own business, the plan may not count it. For people whose pay is mostly variable, the gap between “60% of salary” and “60% of income” can be enormous.
It ends when the job ends. Group coverage belongs to the employer. Change jobs, get laid off, go out on your own, and it does not travel with you. You re-qualify at your new age and your new health, which by then may not be the health you had when you were first covered.
That last one is the quiet risk. Coverage is easiest to get when you least feel you need it, and hardest to get on the day you finally do.
The difference the definition makes is not academic either. “Any occupation” versus “your occupation” is the difference between a surgeon who can no longer operate being covered, and being told she could work a desk.
- Most of your income is bonus, commission, or business distributions
- You are self-employed, or thinking about it
- You earn above your plan’s monthly cap
- You would struggle after 90 days on 60% of base pay
- You have changed jobs recently, or expect to
The honest version
Many people with solid group coverage and modest fixed costs do not need to add anything. We will tell you if that is you.
Bring your benefits summary. We will read the definitions with you, in plain language, and tell you what is actually there.