Group Long Term Disability (LTD) is a benefit normally given to physicians from
their employer for free. The downside is that this benefit isn’t free of side effects.
- False sense of security: Group LTD benefits are not equal to non-cancelable protection. However given that other benefits offered by employers are top notch creates the illusion of quality. One example is that True Specialty Specific /Own Occupation is never available in an LTD plan.
- Up to 60% of income protection is not 60%: There is always a maximum dollar amount stated usually it’s a number between $5k- $15k. However this is only a starting point, a group carrier determines the maximum you could be eligible to receive. Then it is reduced by any Social Security/Workman’s Compensation you do receive. Benefits are then reduced or eliminated by any income you may generate on new income you earn from all sources. Last but not least the benefits are reduced by taxes. Yes the benefits are considered earned income and taxed accordingly.
- Benefits are not portable: If you leave your employer and are not insurable you will be out of luck.
- Group LTD benefits limit/eliminate your ability to purchase individual protection: Individual carriers will recognize any coverage you have in effect to determine how much (if any) they would be willing to insure you for. In other words, before hiring on with any new employer you need to max out your individual policy.
Insurance is meant to give you peace of mind. Group LTD policies with all of their short comings, can’t deliver the security The Medical Profession has come to expect.
