I have group disability insurance through my employer. Do I also need an individual long-term disability insurance policy?

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Maybe not — you should check the amount of coverage you have and the terms of your policy. But you might still consider purchasing an individual disability insurance policy for a number of reasons:

  1. If you switch jobs, you probably won't be able to take your LTD coverage with you. Depending on your age and health at that point, it couldbe difficult to obtain new LTD insurance if your new employer doesn'toffer it or you plan on being self-employed

  2. Your coverage through work might not be enough. If your employer pays the premium, then any benefits you receive are taxed. This could leave you with an income "gap" if you're out of work with a long-term injury or illness. For example, your group policy might cover 60% of your income, but taxes would effectively reduce that by 20-30%. There are supplemental disability policies you can purchase to close that income gap.

  3. Many group policies have caps on coverage, so employees with higher salaries could be under-insured. Again, there are supplemental disability policies you can purchase to close that income gap.