My company pays for disability insurance for me. They changed companies and now the old company is asking if I want to continue coverage. Can I have two policies? My company paid policy covers just short of 70%

  1. 992 POINTS
    Phil Tuccy
    Owner, Insurance Group Consulting, LLC, Florida
    In most cases, you can have multiple disability policies. However, it may not make much sense depending upon the reimbursement terms of each respective policy. Most disability policies have limits on the payment amount which is most often determined by a percentage of current salary. If you have multiple policies, you will need to reveal this to each, at the time of policy purchase and/or at the time of claim submission.

    Multiple disability policies often occur when an employee receives a disability policy from his or her employer but wants to supplement the amount of income reimbursement, in the event of an income loss due to a disability. Often, but not always, payment from one policy will be off-set by the amount of payment from an additional disability policy, so that the policyholder does not receive more than the actual amount of income loss.

    Read each policy carefully, particularly as each addresses payment provisions.
    Answered on June 24, 2015
  2. 11783 POINTS
    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    In the situation you've described, no it would not make financial sense to carry two policies. Both are group plans and both restrict total payouts. You may have a cap of 70% of your income or even 80% which would allow for some additional coverage, but honestly it may prove expensive to do it this way.
    A situation where you could maximize your coverage is purchasing individual coverage prior to joining a group plan. There is no offset in place then and there is a potential to cover 100% of your income. Individual first, group second. That's the only way that works.
    Answered on July 8, 2015
  3. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    Under your current situation I would not carry the old disability policy. Disability insurance is a coordinated product in the sense that any number of policies will not pay more than the maximum scheduled amount usually no greater than 70% The only reason to carry two different disability insurance policies is if you purchase a short term and a long term disability insurance policy.
    The long term policy may have an extended elimination period of 90 days or 180 days before benefits commence. A short term disability plan can commence within in days and pay benefits up to the elimination period of the long term plan. What you are describing sounds like two long term disability plan and would not make financial sense to keep the other policy.
    Answered on July 12, 2015
  4. 2775 POINTS
    Joe 'Gravy' Graves
    Owner, I Hate Buying Insurance, Nashville TN
    Right, Right, Right, Right. In this case... take the new plan.

    If this was outside of work, could you have 2 policies? Sure can. & I don’t mean short term plus ling term. Although my buddy Tim gave some sound advice about that... There are many times that a person should keep the DI plan they currently own while considering a new plan. I won't list out all those reasons. They're very situation specific.

    IF... if you were thinking, "I'll have more protection if I own two plans", I would suggest researching a Critical Illness (CI) plan for its additional benefits. It’s not an income/occupation based protection plan. There are no waiting periods, the money doesn't trickle in month to month, and you receive upon diagnosis a lump sum benefit. Some carriers have plan from $5,000 to $500,000. We often pair a Critical Illness with a Long Term DI plan to meet immediate cash needs & long term income replacement. Just a thought... reach out through the site (respecting their rules about posting links to take you off the site) if anyone reading this wishes to learn more. THANK YOU!!
    Answered on February 13, 2016
  5. 246 POINTS
    Ronald Mesler
    We Protect Doctors, LLC, Boise, ID
    Great question!

    You certainly can have more than one disability insurance policy. Most commonly this occurs when a person has a group long term disability coverage plan and it does not fully meet or cover their income needs if they were to become disabled.

    In those cases individuals want to protect themselves and their family against a catastrophic loss of income in the case of disability. So, they will often supplement a group plan with one or more individual disability policies to more fully protect their income.

    Let me give you an example. A physician earning $200,000 per year has group coverage at work that pays 60% in the case of disability, but has a month cap of $8000. So his group coverage only pays $96,000 per year rather that the full $120,000 if there was no cap. Private Disability Insurance can supplement that amount. Always compare quotes from multiple companies to get the best coverage. Good luck!
    Answered on February 29, 2016
  6. 46 POINTS
    Cesar de la Cerda
    Founder- Investment Adviser Representative, My Benefit Pro,
    Yes, a person can have more than one disability insurance policy. Having more than one policy would depend on an individual needs. However, there may be limits in terms of benefit amount (up to 65% of income), benefit period (how long the benefit will be paid) and waiting period (when the benefit starts). For example, the benefit can not be established to pay more than actual earning and limited to a percentage, such as 65% of gross income. Does this sound a bit technical?

    To keep things simple I would suggest considering the following. Consider a short term policy that would cover your expenses for 3 to 6 months. A long term disability policy typically is set up to start after 6 months. Some major companies cover this benefit in the U.S.A, but typically at a 50% benefit of your base. At open enrollment, you might have the option to buy up to 60% or 65%.

    If you are a good savor, plan to save 3 to six months of your income and then the short term disability could be optional.

    Long term disability benefit options vary from 2 years to retirement age.

    So as you can read, their could be multiple options for disability insurance specific to someone's needs. You should work with someone who can help you determine your options, be it through your employer or indendently.
    Answered on May 13, 2016
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