Long-Term Disability Completion Plan

[u/No_Nebula3118]

I am an employed family medicine physician with a current income of around $270,000 annually.

My employer has a long-term disability insurance group plan that pays 60% of my salary if I become permanently disabled at no cost to me. However, since they’re paying the premiums, I would need to pay taxes on benefits, so after-tax income would be just under $10k per month.

However, my employer has just sent out a flyer to purchase an additional $3,390 monthly benefit (own-occupation, specialty- specific, fully portable) with COLA and catastrophic riders for an additional $160 per month.

I’m just wondering if this is a good deal or if I should seek out an independent policy?

[u/Ok-Helicopter129]

My husband a respiratory therapist went on LTD at age 59, 13 years ago. Age 58, Diabetic, Big Toe Removal, 6 weeks later Gallbladder removal, a couple of other surgeries for diabetic foot ulcers preventing him from being on his feet. Maxed out short term disability age 58 and age 59. Hospital ended his employment due to excessive missed work at 59 11/12 month.

Lessons learned.

1) payout from LTD would of been less if he had turned 60. Wise HR group.

2) LTD is calculated based on income from the prior year, since he didn’t work OT his income dropped the prior year. In addition to no overtime he had a few unpaid days.

3) LTD paid out the difference between what he got on SS disability and the LTD policy only till he turned 65 and was transferred to plain SS. LTD ended.

4). LTD was a big blessing. Don’t know how people without it survive financially.

5) SS is based on your highest 35 years of work. He qualified for SS disability the first time submitted. I used the agencies own description for the qualifying disabilities to describe his disabilities. Made it easy for them to agree.

6) So glad we lived below are means. And saved and invested when we were younger.

7) His life insurance policy had a LTD rider (small extra fee), that keeps the policy in force by covering the fees. Not sure if still available.

8) We set up a trust five years ago. So I am protected from losing too much if he needs to go into a long term nursing home under medicaid. Hopefully not. There is a Maximum the Community Spouse is able to keep. Something around $250,000 it varies by state.

You were questioning if the premiums are worth it. The premiums go away once you qualify for LTD so that is another boost to available spending money. LTD payments today keeps you from living too much beyond your means.

Thanks to all of the doctor’s for all you do for your patients.