Disability Insurance PDF Print E-mail
Group Disability Insurance

Group disability offers an extremely affordable benefit when compared to individual plans. This coverage provides protection for your employees in the event that they become disabled and are unable to work for an extended period of time. Disability protection can go a long way in boosting employee morale and placing your company benefits ahead of your competition. Short-term disability, for example, in an attractive benefit that offers a very affordable means of providing an income to those on maternity or family and medical leave. Benefits such as these are low in cost compared to health and profit-sharing plans.
Short-term Disability Income Insurance:
An employer may provide a short-term disability income insurance plan for employees. This short-term coverage usually provides benefits starting immediately and the amount is a percentage of income or a flat amount. Benefits typically run for 26 weeks, but might continue for two years. The group rate for premiums is significantly better than an individual rate.
Long Term Disability Income Insurance:
  • Long-term disability picks up where short term disability leaves off to protect a worker’s income. After the elimination period (the number of days before benefits are paid), long-term disability insurance pays a percentage of salary for an extended period of time, from two years up to age 65.
  • The importance of disability insurance is made clear by research that shows that more than 1/3 of those receiving long term care are younger than 65. Additionally, some research indicates that between the ages of 24 and 61 the odds are that disability is more likely than death.
  • As with other insurance products, long term disability insurance can be purchased by an individual and owned for life. Generally, the cost will be anywhere from five to ten times higher than a group policy. However, if the premiums are paid with after-tax dollars, the benefits are tax free.
  • Employers often see the wisdom of providing these benefits to attract and retain employees. Group long- term disability is lower in cost and can be paid by the employer or offered as a voluntary benefit to employees at no cost to the employer. If an employer pays the premium, the benefits are taxable.