Should you supplement your ERISA LTD policy with your own?

An advantage of having employer-sponsored insurance policies is that you can typically get them for far less than it would cost to get your own. This is particularly true when it comes to disability policies.

It can be reassuring to know that you have a long-term disability (LTD) policy to help you continue to support yourself and your family if you have to take significant time away from work due to an injury or illness.

Employer-sponsored plans may reimburse only 60% of your income

This might sound fine when you’re healthy and don’t anticipate ever needing it. When you’re actually facing months of not being able to work, you’ll likely find that your employer-sponsored plan only pays approximately 60% of your usual income. If you’re looking at the better part of a year off work, that 60% isn’t going to cover your bills. It may be even less than that in actual dollars if your payments for this insurance are taken out of your paycheck before taxes because you’ll have to pay taxes on your benefits.

This is why many people shouldn’t rely on those employer-sponsored disability policies provided under the Employee Retirement Income Security Act (ERISA) unless they’re able to choose a plan that covers a greater percentage of their income.

Two policies can help you better cover expenses when you can’t work

If you are the sole or primary “breadwinner” in your home, you may want to get an LTD policy on your own to supplement your employer-sponsored policy. You can use your own policy to help cover expenses you couldn’t cover solely with your other policy. It’s important to know the rules and restrictions on both policies, but having two can help you cover more expenses while you’re unable to work.

Whether you choose to get a supplemental policy on your own or not, you should be able to count on your ERISA policy to provide the coverage it states that it will. If you’re having problems getting the payment you deserve on a claim or an outright denial of your claim, it can help to have legal guidance to better assert your rights at a time when the last thing you want to do is fight with an insurance company.