Can my spouse get disability cover with an existing policy ?

by Guest » Mon Jan 30, 2006 07:47 am

My spouse is looking forward to buy an individual DI policy. Two vital issues relating this one would be:
1) a group policy in existence and
2) an existing medical condition.

Here are the details:

1) He is enrolled in the group plan, through his employer.
He needs to pay 100% of the premiums on an after-tax basis.
In case he is disabled, the benefit would be 66 2/3 of his income until age 65. However, his bonus is not considered "income". For example, if his salary is 100k and bonus 25k, the 66 and 2/3% would be based on the 100k only. In the past, his bonus had ranged from zero to $20,000.
Based on the above, is he eligible to purchase an individual policy or will he be considered as having too much coverage ? Since my husband pays 100% of the premium on an after-tax basis, would his benefit be tax-free?

2) Ever since 2 months, he remains diagnosed with a hand tremor. He had gone through a CT scan that came back as normal. He is getting medically treated now.

If he becomes eligible to buy a policy, based on the info in q.1, then how would q.2 affect his eligibility? Please suggest. :?

Total Comments: 3

Posted: Mon Jan 30, 2006 08:43 am Post Subject: group policy

The benefit would be tax free, if he pays the premium with tax $ .
He could certainly buy an amount of disability which would be arrived at from a table. If following your example, he had a $5500 group coverage tax free, he would not be able to get his own policy on top.

A most common problem that most underwriters face today, is a problem that "we don't know what the problem is". Though the physicians can run tests but if nothing turns up, the doctor says let's just wait and watch what comes up next. An underwriter on the other hand has to take a call, then and there. I would suspect they would put off issuing a policy until his hand tremor gets resolved.

These are what I see, for best results you should contact a local agent who handles disability and runs this by him.

Hope this would be some help to you.

Posted: Mon Jan 30, 2006 09:15 am Post Subject: supplementary policy

He might be able to purchase a supplementary policy, with his existing group policy backed by his income verification of the past couple of years, especially since bonuses could be included as income. There are tables, that needs to be reviewed of participation limits between the group coverage and an individual plan.

On the other hand the hand tremors would be looked upon as an issue, or some companies could also put an exclusion rider on the plan, which in effect would disqualify any disability caused by hand tremors. Hence I recommend speaking with a broker who would at least carry on a research and speak to some underwriters from insurance companies, that would certainly give you a much more specific answer.

Posted: Mon Jan 30, 2006 09:33 am Post Subject: group policy

He might also be entitled to a 10-15% rise in income, including the bonus income. That depends upon the company with the most "liberal" issue & participation limits. Regarding his hands, you didn't say what your husband does or what his occupation is.

Moreover, since hand tremors could be the indications of several medical problems, if this would happened to me, I would rather try and get me examined by a specialist dealing with these types of problems, to rule out certain possibilities.

Then, I would look at purchasing an individual coverage. But you may need to run from company to company with a 'yet to be diagnosed' condition.

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