What is group disability insurance?
Group Disability Insurance takes care of an employee who is unable to work because of illness or injury. This is normally pay equal to 60% of their average salary, and is often paid as tax-free income.
1.) Short-Term Disability (STD) (which is usually capped at six months)
A steady income is essential for most people. If an accident or illness interrupts that income, it affects both the employee and employer. Short term disability (STD) insurance is designed to replace a portion of the wages lost when a short term disability occurs. An affordable, flexible short-term insurance plan can provide needed benefits to both the employer and employee.
2.) Long-Term Disability (LTD) (which runs for several years or even until retirement age).
In the event that an accident or illness prevents an employee from working for an extended period of time, the financial impact can be severe for the employee and employers. Long term disability (LTD) insurance is designed to help cover the employee’s expenses while their regular income is interrupted. Flexible plan design options and benefit alternatives are available to meet specific needs. This valuable protection is available with low-cost, tax-deductible premiums.
This insurance is a great way to ensure that injured or sick employees take the time necessary to get healthy and return to work.
One important note: Don’t confuse disability insurance with some other programs. It is different than workers’ compensation insurance, which is mandatory and paid for by employers that pays out if an employee is injured at work. Nor is it social security disability insurance, which is the government program for people with serious long-term conditions who are unable to take on employment.
Want to know more about group disability insurance for employees? Reach out! Flatlands Jessup is here to help!