It is common for group disability insurance policies to contain provisions “offsetting” or reducing the monthly disability benefit by other income benefits being received by the insured, such as social security disability, workers compensation benefits and state disability benefits. Also, these same “offset” provisions often reduce the monthly disability benefit by pension or retirement benefits drawn by the insured. Typically, offset provisions only allow the disability insurer to reduce the monthly disability benefit by pension or retirement benefits associated with the plan sponsor / employer, and not any pension or retirement benefits issued by any previous employer. The policy and offset provision must be read carefully in order to ensure that you could draw pension or retirement benefits associated with a previous employment.
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