IndIvIdual dIsabIlIty Insurance
Are you adequately covered by your
group long-term disability plan?
Adequately insuring your income
by topping up or offsetting your
group long-term disability plan
helps ensure your financial
goals can be met and assets
can remain in place even if a
change in health prevents you
from being able to work.
If a disability results in you being unable
to work and earn an income:
does your group long-term disability plan provide enough
coverage for what matters the most to you?
• Supporting your family (groceries, education, recreation, care for aging parent)
• Maintaining your standard of living (mortgage, car, cottage)
• Continuing with saving plans (retirement, children’s education)
does your group long-term disability plan:
• Insure all sources of your eligible income (commission, bonuses)?
• Have a maximum benefit amount?
• Adjust rates annually?
a group top-up or offset arrangement
A group top-up or offset arrangement with an individual disability insurance policy helps complement your current group long-term disability coverage.
Each is designed to help prevent a shortfall in coverage if a disability prevents you from being able to work.
Group top-up arrangement –
need additional coverage?
a group long-term disability plan:
• Covers a percentage of salary up to a maximum benefit amount.
• Maximum benefit amount may be low in relation to your income.
a group top-up arrangement:
• Complements your current group long-term disability plan with additional coverage from an individual disability insurance policy.
• Individual disability insurance may cover an additional portion of salary, bonuses, income splitting, profits, etc. that are not covered under a group long-term disability plan.
• At claim time, the benefits under the group long-term disability plan and individual disability insurance policy may both become payable (subject to the terms and conditions of each policy, including the definition of disability). One does not offset against the other.
example:
Paul has an $85,000 annual income with a maximum monthly group long-term disability benefit of $2,500. Based on his income of approximately $7,000 per month, he is eligible to top-up the group plan with a $2,025 monthly income benefit from an individual disability insurance policy.
group top-up
Individual disability insurance policy
Group long-term disability plan benefit
amount
$2,500 $4,525
benefit start date time
Group offset arrangement –
needs go beyond additional coverage?
A group offset arrangement may be considered instead of a group top-up arrangement if there is a need for features and benefits of an individual disability insurance policy beyond the need for additional coverage. For example:
• The definition of disability under the group long-term disability plan doesn’t fully suit your needs.
• Optional benefit riders such as cost of living adjustment or return of premium are desired but not available under the group plan.
• You want coverage that can be maintained in force should you no longer have group long-term disability coverage in the future.
under group offset arrangement:
• An individual disability insurance policy can help strengthen existing group long-term disability coverage by backing it up and enhancing the overall protection.
• The group long-term disability plan pays first. At claim time, if the group long-term disability benefit is reduced or not payable, a benefit amount may be payable under the individual disability insurance policy.
• As the benefit payable under an individual policy will be offset against the group long-term disability benefit payable, a 10 per cent premium reduction applies to the individual disability insurance policy.
example:
Paul has an $85,000 annual income with a maximum monthly group long-term disability benefit of $2,500. Based on his income of approximately $7,000 per month, he is eligible to offset the group plan with a $4,525 monthly income benefit from an individual disability insurance policy.
At time of claim, he is eligible to offset the maximum benefit payable under the group plan against the $4,525 monthly income benefit from his individual disability insurance policy to receive an additional $2,025 each month, resulting in total monthly benefits of $4,525.
Under Paul’s group long-term disability plan, after two years, the definition of disability changes and becomes more restrictive. The more comprehensive definition of disability under his individual disability insurance policy may mean that a $4,525 monthly income benefit is payable after the first 24 months on claim if benefits are no longer payable under the group plan (subject to the terms and conditions of each policy including the definition of disability).
Individual disability insurance policy Group long-term disability plan $2,500 $4,525
benefit start date time 24 months on claim group offset (after 24 months) benefit amount group offset (first 24 months)
Help ensure you’re adequately protected if the unforeseen happens.
A group top-up or offset arrangement with an individual disability
insurance policy may help prevent a shortfall in coverage if a
disability prevents you from being able to work.
Great-West Life and the key design are trademarks of The Great-West Life Assurance Company.
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