As a Federal Government worker, it is important that you understand the benefits provided to you by the FERS Disability program. A proper understanding will allow you to effectively assess the income protection you have and make an educated decision of whether or not you should obtain individual Disability insurance as a supplement to what you are already provided.
Without going too far into detail, Federal Government workers are provided Disability insurance benefits through the FERS program once they have completed 18 full months of service. For any injury or illness which restricts you from performing your current job and is expected to last beyond one year, you are eligible to receive 60% of your annual salary during the first 12-months of a disability claim and 40% of your annual salary for each year thereafter.
Something that you may not know is that although you are provided 60% and 40% Disability coverage, you may actually receive a substantially smaller benefit than you expect at claim time. Since FERS Disability benefits are primarily paid for by the Federal government, any benefits you receive during a claim are taxable as ordinary income. Due to this taxation of benefits, along with the reduction from 60% to 40% coverage, Federal government workers are faced with a tremendous shortage in income protection. Thus, Federal workers are able to obtain individual Disability insurance as a supplement to their provided coverage.
Similar to how individuals in the private sector purchase individual Disability insurance to supplement their group Disability insurance, Federal government workers can also obtain individual Disability insurance to supplement their FERS Disability benefits. Amongst the many options that are made available for Federal employees, there are some that are more attractive than others.
As you consider purchasing individual Disability insurance, look for two primary characteristics in a policy. The first is to be sure that you are not restricted to which policy provisions and riders can be added to your policy. If you are going to spend money on obtaining individual coverage to properly and effectively protect your income, be sure that you are not restricted on what you can add to your policy. Secondly, be sure that your individual policy benefits will not offset with Social Security disability benefits. Your FERS Disability benefits will already be off-settable with Social Security Disability. It is bad enough that the majority of your FERS benefits may offset with Social Security benefits but again, if you are spending money in order to properly protect your income, you should be sure that you are not paying for Disability insurance that will be reduced as your FERS benefits are already.
Purchasing individual Disability insurance as a means of supplementing the shortage that exists in your FERS Disability coverage is a responsible and intelligent way of effectively protecting your income, your family and your future. Be sure that you work with someone who is familiar with the details associated with FERS Disability benefits and also the individual options available for Federal workers. For more information relating to your FERS benefits, visit Disability benefits for Federal Government workers.
Michael Relvas is a Disability Income Specialist with MR Insurance Consultants, an insurance and financial services firm. Based just outside of Washington DC, Michael has worked with many Federal Government employees to improve their understanding of FERS Disability benefits and also to obtain individual Disability insurance as a supplement to FERS. If you have questions related to FERS Disability insurance and the individual options available to you, call 800-817-4522 or visit us at Disability Income Insurance.
Without going too far into detail, Federal Government workers are provided Disability insurance benefits through the FERS program once they have completed 18 full months of service. For any injury or illness which restricts you from performing your current job and is expected to last beyond one year, you are eligible to receive 60% of your annual salary during the first 12-months of a disability claim and 40% of your annual salary for each year thereafter.
Something that you may not know is that although you are provided 60% and 40% Disability coverage, you may actually receive a substantially smaller benefit than you expect at claim time. Since FERS Disability benefits are primarily paid for by the Federal government, any benefits you receive during a claim are taxable as ordinary income. Due to this taxation of benefits, along with the reduction from 60% to 40% coverage, Federal government workers are faced with a tremendous shortage in income protection. Thus, Federal workers are able to obtain individual Disability insurance as a supplement to their provided coverage.
Similar to how individuals in the private sector purchase individual Disability insurance to supplement their group Disability insurance, Federal government workers can also obtain individual Disability insurance to supplement their FERS Disability benefits. Amongst the many options that are made available for Federal employees, there are some that are more attractive than others.
As you consider purchasing individual Disability insurance, look for two primary characteristics in a policy. The first is to be sure that you are not restricted to which policy provisions and riders can be added to your policy. If you are going to spend money on obtaining individual coverage to properly and effectively protect your income, be sure that you are not restricted on what you can add to your policy. Secondly, be sure that your individual policy benefits will not offset with Social Security disability benefits. Your FERS Disability benefits will already be off-settable with Social Security Disability. It is bad enough that the majority of your FERS benefits may offset with Social Security benefits but again, if you are spending money in order to properly protect your income, you should be sure that you are not paying for Disability insurance that will be reduced as your FERS benefits are already.
Purchasing individual Disability insurance as a means of supplementing the shortage that exists in your FERS Disability coverage is a responsible and intelligent way of effectively protecting your income, your family and your future. Be sure that you work with someone who is familiar with the details associated with FERS Disability benefits and also the individual options available for Federal workers. For more information relating to your FERS benefits, visit Disability benefits for Federal Government workers.
Michael Relvas is a Disability Income Specialist with MR Insurance Consultants, an insurance and financial services firm. Based just outside of Washington DC, Michael has worked with many Federal Government employees to improve their understanding of FERS Disability benefits and also to obtain individual Disability insurance as a supplement to FERS. If you have questions related to FERS Disability insurance and the individual options available to you, call 800-817-4522 or visit us at Disability Income Insurance.
