Supplemental disability income protection is an insurance contract intended to fill any gaps in coverage from primary disability income protection sources. These gaps usually exist for two reasons:
- Benefit payment maximums that exist in the primary disability policy coverage. For example, with employer provided group disability insurance coverage, even though the amount of a monthly disability income payment is calculated as a ‘fixed percentage of salary’ of each employee’s gross salary, there is always a master ‘policy maximum monthly payment’ amount. This employer group policy maximum can limit the ‘fixed percentage of salary’ payment amount. A supplemental disability income policy can address such a limitation; and/or
- Benefit payment exclusions that exist in the primary disability policy coverage. An employee should review the ‘exclusions’ section of an employer provided group disability insurance contract. Payment exclusions for events such as: Injuries caused while traveling on non-commercially scheduled transportation, or, Injuries due to war or act of war can become quite relevant to employees who travel on extended mission to some parts of the world. And although workers compensation should cover on the job injuries, a workers’ compensation policy can also contain coverage exclusions. A supplemental disability income policy can address such exclusions.