How Much MetLife GIO Can I Exercise with Group LTD Coverage?

[Raj]

I had a few questions about disability insurance:

I am currently finishing fellowship and will be taking up my first job (W2 hospital employed) in a few months. I bought an own occupation DI (coverage 5000$) one year ago from met-life.

My new employer offers a LTD with 66% coverage of earning up to 17,500$. It applies to own speciality.  I am debating if i should increase my individual DI policy coverage. I have been given an option to increase my individual DI coverage up to 12000$ by the company. I read the articles on DI on this blog, but still unclear on a couple of questions:

1. If i were to get disabled and lost >20% of income due to it, could my employer just fire me and deny any group LTD benefits for the future? Thinking about this makes me want to purchase more individual policy.

2. If i were to get disabled and manage to get benefits from the group LTD, i would be quite comfortable living off 17,500$. I do realize that 17500 is pre-tax and i may end up getting less, may be around 10,000-12,000$ after taxes, which again would be enough for me. This makes me not want to increase my individual policy. Also, if i do indeed have a bigger individual policy (lets say worth 10,000$), would it necessarily pay (in all instances) in addition to the group LTD coverage (lets say post-tax 12,000$, so a total of 22000$)?

3. Also does the amount of group LTD coverage offered by the employer, affect the total coverage i can buy from my individual policy? i was given the quote for 12000$ even without telling the agent about the group LTD coverage.

Thanks for your time!

 

[LBKCLU]

Yes, beyond the "New In Practice" limit of $7,500 month that MetLife provides (those that are 24 months or less out of training) and is available regardless of your earned income or future employer provided group LTD, you employer provided group LTD coverage will be taken into consideration.

MetLife would look at their Issue & Participation (I&P) Limits to determine that amount of individual coverage that you are eligible for based upon your income, then subtract out the individual coverage that you already own ($5,000 month plus the automatic increases, if you have the AIB Rider on your policy) and then subtract out 75% of your employer provided group LTD plan (this is what MetLife uses as a discount knowing the monthly benefit from it will be taxable).

1. No, typically if you have a loss of income of 20% or more, your group LTD plan would pay you benefit based upon the percentage of income that you have lost (however, you should get a summary of your group LTD plan to confirm this but this is generally the case).

2. Yes, the individual policy would pay in addition to the group LTD plan assuming you met the definition of total disability under both policies. Don't worry, MetLife won't allow you to purchase more than what I mentioned above as they don't want to give you an incentive to become disabled and earn more not working then you did when you were working.

3. Yes, see above. It is very unlikely that you would qualify to purchase the full $12,000 month unless your starting salary is extremely high. If you provide me with your salary guarantee, I can calculate the amount of total individual coverage available with MetLife for you.

 

[Raj]

Thanks for your input Lawrence. I sent you a message.

Still wondering about the first question. Since the group LTDs are not portable between employers, could hospitals get rid of disabled physicians under the guise of "poor performance, lack of productivity" etc.? Not sure how often this happens in real life.