|
Group
Coverages Disability Insurance
Group
Disability Insurance can provide income protection for an eligible
employee if he/she should become disabled as a result of a non-occupational
illness or injury. Generally, eligible employees are employees actively
at work, working at least thirty hours per week. Disability coverage
is divided into Short and Long Term coverage.
Short
Term Disability (STD)
STD
generally covers employees when they are out of work for relatively
short periods of time, ranging from thirteen weeks to one year.
Most often employers select a thirteen or twenty-six week benefit
duration. Employers can also choose the waiting (elimination) period
that must be satisfied before disability benefits begin. A common
waiting period is one day for an accident and seven days for a sickness;
however, there are several combinations of waiting periods that
the employer may choose from.
The
amount of weekly benefits for STD coverage usually ranges between
60-70% of the employee's normal income, with a pre determined weekly
maximum. Depending on industry driven variables, the weekly maximum
benefit amount can vary. Employers also have the option of purchasing
a flat weekly benefit amount for their employees instead of basing
the benefit on a percentage of earnings (ie. $150 per week regardless
of the employee's salary).
Long
Term Disability (LTD)
LTD
generally covers employees up to age 65, depending on the person's
age at the time of their disability. Like STD, LTD has waiting (elimination)
periods that must be satisfied before benefits can begin. The most
common elimination periods are 90 or 180 days and are usually complimented
by a short term disability policy with the same benefit duration.
Waiting periods for LTD can be as short as thirty days, but it is
important to remember that the shorter period, the more expensive
the coverage.
Similarly
to STD, the benefit is expressed as a percentage of the employee's
earnings, but is based on a monthly vs. weekly basis up to a defined
monthly maximum. A common LTD benefit is 60% of a person's monthly
earnings up to $5000 per month. This maximum benefit amount should
be adjusted depending on certain industry variables, such as size
of the group and type of industry.
Group
Disability Insurance is provided on either a contributory or non-contributory
basis. A contributory plan is one that is paid partially or in full
(AKA voluntary plan) by the employee. A non-contributory plan is
paid in full the the employer. The cost for non-contributory plans
is less than contributory plans because there is usually 100% participation
when the employer is paying the premium and carriers favor that.
Participation
Requirements
Insurance
carriers usually require 100% participation in a non-contributory
plan and 75%
participation in a contributory plan.
If
you would like to request a Group Disability Insurance quote, please
click here.
|
