October 2007 Newsletter

The Big Picture
Disability Insurance

As I mentioned in last month's newsletter, this is the season for open enrollment at most companies. One of the options available through many employers is disability insurance.

All too often, the need for disability coverage is underestimated. Many of us know someone who has suffered a back injury or other disabling event that has them out of work for months or longer. By taking advantage of the group disability insurance, you can help to protect yourself against the financial losses caused by a disability.

Some companies offer short-term disability and allow you to pay for long-term coverage. Others provide long-term coverage at salary payout of 50% and allow you to increase your benefit to 70% of your income. Consider taking advantage of the maximum benefit allowed through your company. The cost is typically minimal for the about of benefit you will receive.

When your employer provides coverage, the benefit you receive is typically taxable to you. When you purchase additional coverage through your employer, you may have the option to pay for this coverage through either pre tax or after tax payments. While the temptation might be to use the pre tax payments to reduce your cost, you may want to make after tax payments. The after tax payments (which are typically inexpensive) will provide you with a tax-free benefit. If you become disabled the additional money from the tax-free benefit will come in handy.

If you have any questions regarding your employer's benefits, please contact our office at 410-732- 2633/877-807-2633. We will be happy to review your options with you.