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Minimum Speed Limit = 65% of income
If you do not have at least 65% of your monthly income insured, you may be inadequately insured and at risk. When you can't work, how will you pay for ...
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Food
Electricity
Mortgage/rent
Auto payments
Savings
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Clothing
Phone
Property insurance
Auto insurance
Investments
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Heating
Internet/Cable TV
Health insurance
Tuition Payments
Miscellaneous
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Evaluating Coverage Gaps in Group Plans
Typically a Group LTD plan covers 60% of salary before tax. However, it usually has a maximum benefit cap and does not cover incentive compensation, such as bonuses and commissions. Coverage for mental & nervous conditions may not be what you thought they were. Do you really know?
In addition, if the premiums are paid by the employer, any benefits received by the employee are generally taxable as income. For example, a benefit cap of $5,000 per month would amount to a $60,000 annual LTD benefit before taxes. This falls far short of the income requirements of highly compensated employees, resulting in inadequate protection from the group plan.
What would happen to your family if you experienced a ....
