If You Don’t Plan for Your ERISA Long Term Disability Benefits to be Reduced by the Receipt of Social Security Benefits, You’ll Hate Yourself Later
A long term disability policy is supposed to provide you with peace of mind. Unfortunately, many long term disability insurance policies have a clause in the policy which allows the long term disability carrier to reduce your long term disability benefits by the receipt of Social Security Disability benefits and even other income such as workers compensation. If, for example, you make $24,000 before you became disabled, your pre-disability income was $2,000 per month. Long term disability benefits normally pay 60% of the pre-disability income and in this case, the gross monthly LTD benefits would be $1,200. That sounds okay but if...
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