Is this company DI worth it?

[MDHubby]

Hello all,

I'm not in medicine, but I'm looking to get my finances in order so we can focus on my wife's (who's in residency). My employer offers Long Term Disability after a 6 month "Salary Continuation Program." I currently make about $95k and have 50% pay guaranteed through the LTDI (which I realize is not a ton, but also my wife is a doc). It costs me about $50 a month. I am 30 years old. Here's the details of the program:

 

The Long Term Disability Income (LTDI) Plan benefits begin after your Salary Continuation Program (SCP) payments have
been exhausted. If you are not eligible for SCP payments (for example, if your disability was work-related and covered by
Workers’ Compensation), your LTDI benefits begin after 26 weeks of disability. LTDI benefits are paid monthly.
To receive LTDI benefits, you must be:
• Totally disabled — unable to perform the regular duties of your own job or an alternate job, if one is available and is
medically appropriate and consistent with your training, education, experience and compensation, as determined by the
<Company>; and
• Under a doctor’s care for the disability.
To continue receiving benefits after 12 months of disability (not including any days for which you received personal illness
payments), or 18 months in the case of a work-related disability, you must be unable to perform the duties of any job —
whether for the Company or any other employer — for which you are reasonably suited by education, training or experience,
as determined by the <Company>.
You or your doctor may be asked periodically to provide proof of your continuing disability. Doctors’ charges associated with
providing proof, if any, will be reimbursed at reasonable and customary rates, as determined by the <Company>.

 

Emphasis not mine.

This seems to be pretty stringent, and after receiving 12 months of DI they expect you to try to get a job. I'm in Aerospace Software Engineering & Management so I kind of could work a lot of places... which is what worries me. Would my money be better spent in some sort of individual DI?

[Miss Bonnie MD]

Private DI is always better. Speak to a broker and see what your options are.

[Scott at MD Financial Services]

These type of restrictions are pretty common in group disability.  In my opinion, why you see these is an HR person or office manager has been tasked to 'look into getting disability insurance for the firm' and when they are presented with plans that say 60% to 10k (or whatever the amount) and here is the price then the choice comes down to price.  Most of the time the broker offering the coverage is the Health Insurance rep that rarely knows much about the inter workings of these contracts and the person in charge of the decision typically knows less, that is how these things get into place with businesses.   Rarely do firms or practices want to hear about 'language, functionality, or claim time behavior' they just want to hear about how low can the cost be.  It is frustrating on our end because when that first person has a claim then the chorus begins...."they founds a loop hole, they are cutting off my claim", and the such when in reality the contract is performing to the language that was decided on (read or not) and purchased.

I can't tell you that you should buy a different policy but I can say that you should play out a claim on paper and think about:

1: What is the language of the waiting period (how hard it is to become claim eligible)

2:  If I get on claim, what are the requirements for full payment (capacity of staying on claim)

3:  If I can/choose to work in something else how does that affect the payment from the policy

4:  At some point can they say "go to work or not but we now don't have to pay because you have a 12 month own occupation clause and now you are going to be a great Earth Science teacher in 9th grade and because of your education that is reasonable even though you don't have training".  From your post above 'any other employer — for which you are reasonably suited by education, training or experience,
as determined by the '.

It really is no big surprise people are often disappointed with the performance of these contracts but you kind of get what you pay for, language really does matter....

Let me now if we can help further.