FedEx & UPS Loss of Medical - How do they compare?

This episode was requested by listener feedback! Our host, Certified Financial Planner™ and GA pilot, Tim Pope compares long-term disability (LTD) coverage for FedEx and UPS pilots, examining how each plan works and how they stack up across the industry. He breaks down union and core benefits, highlighting key differences in benefit duration, tax treatment, monthly caps, waiting periods, and income offsets.The episode also explores how FedEx and UPS compare to passenger airlines, and what cargo pilots should keep in mind heading into contract negotiations.What You'll Learn from This EpisodeUPS Disability Coverage: Core plan pays 66.7% of income for 10 months after a 6-month wait. Union add-ons are tax-free but capped at $7,500/month.FedEx Disability Structure: Core pays 60% for 24 months, then 50% coverage via the supplemental policy to age 65, capped by IRS 401(a)(17) limit.The lookback advantage: FedEx uses the highest 12 of the last 36 months’ pay, protecting recent high earners.Offset Clauses: Fedex reduces benefits for worker’s comp, Social Security and other earned income. Tax Treatment Differences: Core plans are taxable; union benefits are tax-free due to after-tax premiums.What Could Improve: UPS could extend coverage and reduce wait times; FedEx could drop income caps and continue NECs/ during disability.Industry Context: FedEx’s LTD is more in line with major passenger carriers than the UPS plan. Planning Note: Union LTD Plus Ups and side income help, but knowing your offset rules and caps is critical.Resources:Schedule An AppointmentOur Practice’s WebsiteSend Us Your Questions: [email protected] episode is sponsored by: Beacon RelocationBeacon Relocation is a real estate firm helping pilots and air traffic controllers save money on their real estate transactions. By tapping into their network of over 1500 real estate agents across the country, pilots can save 20% of the real estate agent’s commission towards your closing cost on the sale or purchase of your home. Visit https://www.beaconrelocation.com/ to learn more.Timothy P. Pope is a Certified Financial Planner™and principal owner of 360 Aviation Advisors, LLC (“360 Aviation Advisors”), a registered investment advisory firm. Investment advisory services are provided through 360 Aviation Advisors, in its separate and individual capacity as a registered investment adviser. Podcast episodes are provided through Pilot’s Portfolio, in its separate and individual capacity.We try to provide content that is true and accurate as of the date of publishing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. We assume no responsibility for information contained on this website and disclaim all liability in respect of such information, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements.Links to external websites are provided solely for your convenience. We accept no liability for any linked sites or their content and remind you that we have no control over their content. When visiting external web sites, users should review those websites’ privacy policies and other terms of use to learn more about, what, why and how they collect and use any personally identifiable information.Usage of this content constitutes an explicit understanding and acceptance of the terms of this disclaimer.