Protecting one’s ability to earn an income remains among the most important financial planning goals for many individuals. Without an income, many financial strategies can simply derail.
That is why one of the most valued benefits an employer can offer is disability income insurance. This protection can provide a way for someone who cannot work to help meet expenses.
A new 2010 study Employer Perspectives on Disability Benefits, made possible by The American College and MassMutual, and conducted by The Boston Research Group, shows that many employees are underinsured when it comes to protecting their income.
- Most employees don’t pay for their group long term disability coverage. Benefits are taxable1 – further reducing the net monthly benefit amount.
- The majority of group plans offers a basic foundation of coverage – but limit benefits for high earners. While 61 percent of firms have $10,000 or more as a maximum monthly benefit, only 28 percent offer $15,000 or more as a maximum monthly benefit amount.
- For those who depend upon commissions and bonuses, the post-disability reality could mean not having enough income to meet their regular expenses. On average, just 27 percent of base plans include variable compensation in their income protection.
Study findings also reveal ways some employers choose to enrich their disability benefit offerings.
1 The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Disability income insurance policies are issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111. Policies have exclusions and limitations. For costs and complete details of coverage, call your agent or MassMutual at 1-800-272-2216 for a referral to an agent.
Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.