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Which disability insurance policy should I choose?

If I decline benefits at work, I can get an additional $2 per hour, which works out to be $4,080 per year. I've already switched to my wife's plan for health, dental, & vision coverage, which is less than half of what I pay for individual coverage with my current company. I also was able to get a life insurance policy at a competitive rate. My issue is with disability insurance. I have a history of sleep apnea which is now so mild that my doctor says that treatment is not needed. Metlife has quoted me a policy for 5 year term of disability coverage for $97 per month with no exclusions. Mutual of Omaha has given me a quote of $106.87 for disability coverage until I turn 67, but they are exlcuding any disability due to or related to sleep apnea. Which disability coverage policy should I chose, or should I just stay with my employers plan and not worry about the extra $4,080 I would get by declining benefits with them? Thanks for the replies! The policies have a 90 day exclusion period then are in force for 5 years with a qualifying disability for Metlife and till age 67 for Mutual of Omaha, which has the sleep apnea exclusion. The monthly benefit is $3600. Thanks again for the replies. Do you think the limited benefit period of 5 years is a problem or is the chance of me having a catastrophic illness or injury very remote? My employer's short and long-term disability group policy would provide coverage until age 65 if I were to become permanently disabled (60% of pay) and there are no pre-existing condition exclusions. However, as I mentioned before, I would forfeit the extra $4,080 per year by keeping the policy. What are your thoughts? Yes, these are offers. Yes, I did go through two different agents initially. The insurance broker with the Metlife agent has given me all the pluses and minuses of my three choices and is leaving the decision up to me. I'm definitely leaning towards the metlife policy.

Public Comments

1. Are we talking short term, or long term disability? For long term disability, you could consider relying on SSDI. For short term, I'd bank that $4080 a year, and then some, and "self insure". But it WILDLY depends on your total income, and your age.
2. I would not consider a policy that excludes your pre-ex condition, especially sleep apnea. Many health conditions can be indirectly related to sleep apnea, and you could be denied. You can consider the policy where the indemnity is non taxable. You should check the policy wording.
3. First of all, kudos for realizing that this is probably the best possible use of that extra $2/hour. Normally, one needs disability insurance more than one needs life insurance, since one is more than three times as likely to be disabled during one's working years than to die; and when one is disabled, living expenses usually increase. "What the?" makes a good point regarding the taxability of the benefit; this is irrelevant however, since all individual policies provide a tax-free benefit (as opposed to group plans, for which benefits are taxed proportionally to the portion of the premium paid by the employer). Given that your additional pay more than covers the premium and your benefits are tax-free, the individual plan is by far the preferable one. And unless you have an emergency fund of at least 7-10 times your annual income, self-insuring is not an option.
4. Why aren't you asking the insurance broker that HOPEFULLY submitted both applications for you? You hopefully did not go through different agents to get these policies because now how are you going to get unbiased advice as to which is better? A good insurance broker would have quoted a half dozen companies and recommended one or two to apply to and then THEY should be helping you choose....not a bunch of strangers that don't know all the facts. The only advantage to the group policy would be a permanent disability that would keep you from doing anything. Your group policy likely only pays for 2 years, but then if you can serve up burgers and fries, then you're done getting benefits. The answer to your question is ask your insurance broker and financial advisor. Also, and most importantly, are these QUOTES or OFFERS? Quotes are meaningless as there's no guarantee you'll even get the policy. PS M.O.O. is notorious for rate increases....just as an FYI.