Disability Insurance Policies

Disability insurance is a very popular voluntary employee benefit. Statistics show that most employees do not have the financial resources to miss work for 30 to 90 days, yet one in four 20-year-olds will experience a need for disability relief at some point before they turn 62 years old. Not only does this insurance benefit your employee, but it can help your company retain a valuable employee once they can return to work if the disability is temporary.

There are several things to think about when choosing a disability policy to offer as a voluntary benefit. It’s easy to become confused regarding what types of policies are available for disabilities. Let’s define some terms. These policies are usually used if the qualifications for social security disability insurance (SSDI) are not met.

  • Long-term disability insurance (LTD) – Lasts many years, even to retirement when needed. It will replace 40% to 60% of income when a medical incident prevents an employee from working.
  • Short-term disability insurance (STD) – Replaces income for a shorter period of time until the employee can get back to work.
  • Long-term care insurance (LTC) – Pays for home care, services in a nursing home, assisted living, determined as a daily or monthly benefit. Includes devices and home modifications necessary to stay home longer. Maybe employer-paid or employee-paid.
  • Group disability insurance – This is a policy for a company group or organization which is meant to provide compensation if an employee is unable to work because of an injury or illness.

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