From the course: Risk Management and Insurance Planning: Designing for Client Needs
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How do you buy disability insurance
From the course: Risk Management and Insurance Planning: Designing for Client Needs
How do you buy disability insurance
Now that we know what insurance benefits are, we need to answer the question of how we actually pay for them to begin with. The two most common ways to purchase disability insurance are through a group plan or by purchasing an individual plan on your own. The primary advantage of a group disability plan is that premiums are generally lower than a similar plan purchased individually. Additionally, many employers pay a portion of the cost, but as previously mentioned, benefits received from a group plan are taxable. For individually purchased plans, there are three key advantages. One is that the policy is portable, which means if the person leaves employment with the company, the disability plan stays in force. The second is that the plan can be tailored to the individual's needs, whether that that is, the definition of disability or any riders of the benefit amount. Also, the benefits are tax-free. Unfortunately, the drawback here is that since it's an individual purchase, there isn't…
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