what you should know about group long term disability - Spencer Insurance Agency, Inc

Is Long Term Care Insurance right for you?

Long Term Care - Be Prepared

Is Long Term Care Insurance right for you?  You need to ask that question.

Well tax day, April 15, 2019, is behind us now.  Taxes are paid or you received an extension.  Taxes are bittersweet.  They take money out of our pockets but yet provide much needed services.  I don’t have a problem paying my fair share.

But how much is fair?  We work every day and try to put money aside in 401K plans or IRAs so we can have a secure retirement. Our retirement assets could well be our largest asset.  Do you protect that asset?

The chance of a house fire is 1 in 300 but we would not hesitate to get homeowner’s insurance. The chance of an auto accident is 1 in 30 and it is required in Pennsylvania that we have auto insurance. The chance that you will need long term care is 4 in 10 yet few of us have any insurance to protect our retirement assets from the dangers of expensive long term care.

Genworth’ 2018 cost of care report tells us that the average cost in the Philadelphia area for a home health aide is $54,912 a year. The cost of a semi-private room in a nursing home is $124,465 a year.  How long would it take to use up your retirement assets to pay these costs?

Long term care policies have only been around since the 1970s.  But they really did not catch on until the 1980s and 90s.  There was very little data to help insurance companies set rates for these products so as a result costs have gone up dramatically over the years.  Some policies had multiple increases of 15% or more.

In the last few years many new options have been introduced by life insurance companies.  These new policies referred to as hybrid policies are life insurance policies that contain long term care riders.  These riders allow you to take out a percentage of your life insurance death benefit early to help pay for long term care costs. If set up properly these payments would be tax free.  For example if you have a $250,000 life insurance policy, one company’s rider would allow you to take out 4% a month ($10,000) to help pay your long term care costs.  When your death benefit is exhausted the policy ends and there would be no life insurance.  However, if you never need long term care or die before using all the benefit then the remainder of the life insurance benefits would be paid to your beneficiary.

Many clients we talk to are not aware of these options.  Since these policies are life insurance you need to be healthy to get the coverage.  Also, the younger you are the less the cost.  Contact Spencer Insurance agency to learn your options.  Don’t assume these policies are not affordable for you.

Let us help you protect those retirement assets you spent years accumulating.

Has your Open Enrollment period begun?

If you work for a larger employer you may receive some group life and long term disability benefits.  You probably ask yourself “Should I purchase the supplemental life insurance that is offered? Spencer Insurance Agency wants to help you make this important decision.  There are times it makes sense to purchase this coverage and times when you are better off getting it on your own.  Check out the pros and cons on our website.  I think you will find this very helpful.

Do you have group Long Term Disability Insurance?  I strongly suggest you elect this coverage even if you need to pay the premiums. If you are able to buy up to 70 % do it!  The chances that you will be disabled before age 65 is far greater than the chance that you will die prior to age 65. But be careful of the trap!  Many of these group long term disability plans have a monthly cap.  Check out my article “Is my employer paid Long Term Disability Plan enough? When is 60% only 30%? “

Don’t be caught short!  Contact us today to discuss your options with “Open Enrollment.” Remember your open enrollment only last a few weeks.


Spencer Insurance Agency was voted the “Best Insurance Agency” again for the third year in a row.

When is 60% only 30%?

Beware of your Employer Group Long Term Disability!

I always enjoyed math, but this is scary.

Many employees rely on their employer’s Long Term Disability Plan to provide income for their family if they become disabled.  Thankfully many companies offer this valuable benefit.

However, if you make over $75,000 a year, be sure to read the fine print in your employee benefits manual or website.

Why,  many plans cap the monthly benefit you can receive from your group Long Term Disability Plan at $5000 per month.  For most employees that may be sufficient, but if you make over $75,000 a year you may be getting less than 50%.  Let me explain. . .

Let’s suppose you make $150,000 a year.  You think your employer’s group long term disability plan will provide you 60% of you salary or $7500 per month.  Think Again!
Remember, your plan caps the benefit at $5000 per month, so you do not receive $7500 per month but just $5,000 per month.  That’s bad enough, but it gets worse.  Since your employer is paying for the coverage, the benefits you receive are taxable. So assume you are in a tax bracket above 25% then the IRS takes another $1250 per month in taxes leaving you with take home pay of just $3750 per month or 30% of your salary.

Here is the good news!  You found this out BEFORE you became disabled and can take action to fix this shortage.  Spencer Insurance can provide you a supplemental disability policy so you are not caught short.  Call us today for a disability review at 215-885-2200 or Check Here to reach us online.  For our Free Report “HOW TO
Click this Link: http://www.spencerinsurance.com/docs/special_report_disabillity_insurance.pdf

Act now before you become disabled.


Check out how you can win an iPad mini.