Disability Insurance Continuation

The disability insurance plan at Lerners LLP consists of an individual policy for $4500/m which is referred to as the GSI portion, and a group benefit top up which is referred to as group insurance.  The total benefit is based on the following formula:

  • 60% of the first $4000 of monthly income, plus 45% of the remaining monthly income, minus $4500

The maximum benefit is $18,500/m tax-free for the GSI and group insurance combined.   The benefits are tax- free because you pay the premiums.  Benefits at time of claim are payable until you recover, or age 65, whichever is sooner.  The GSI and group insurance include benefits for total disability in your own occupation as well as partial/residual. 

If you continue to work past age 65 the group insurance terminates, but the GSI of $4500/m can be continued with the payment of the premium as long as you are working a minimum of 30 hours a week.   The plan becomes a guaranteed renewable contract in which premiums are not guaranteed and can change on a class basis.  There is no provision for partial/residual claims after age 65.  Benefits are payable for 2 years per claim if you become totally disabled in your own occupation.  At age 75, the benefit period reduces to one year per claim.

If disability coverage is not required at age 65, the GSI policy can be cancelled or converted to a Long Term Care policy (see details under Long Term Care).  There is also a provision to convert the plan to a Hospitalization Indemnity Benefit in which $100 is payable every day you are hospitalized for up to 6 months.

For further information or to discuss your needs, contact Terry Zavitz of Zavitz Insurance & Wealth at 1-888-347-2437 or terry@zavitzinsurance.com.