Long-Term Disability Insurance
An unexpected injury or illness doesn’t have to hurt your employees’ financial future. Protect your team during their recovery with long-term disability insurance.
Understanding Long-Term Disability Insurance
Long-term disability coverage acts as a financial safety net for individuals who can’t work for an extended period, from several months to years. Employees can purchase their own policies, but many employers also offer group policies, which tend to be more affordable than individual coverage. InSource offers affordable long-term disability insurance options from the most trusted carriers so that you can find the perfect policy for your business and employees.
How It Works
When an individual is unable to work due to a health issue, they can apply for disability benefits, which cover a portion of their income while they recover. These disability payouts prevent employees from draining their savings or other investment vehicles when they don’t have a regular paycheck.
Long-term disability insurance typically doesn’t kick in until three to six months after an employee leaves work, which is why many companies offer both long- and short-term disability insurance. Employees can start receiving benefits under their short-term policy shortly after their injury or illness occurs. Depending on the policy, it can cover anywhere from 40%–70% of their income for several months.
Once short-term coverage runs out or an employee reaches an elimination period specified in their policy, they can apply for long-term coverage. Long-term benefits can last several years or even until the injured person reaches retirement age, and they often cover between 50% and 80% of an employee’s income.
What It Covers
Some medical events that may be covered by long-term disability insurance include:
- Autoimmune diseases
- Back injuries
- Cancer
- Chronic pain
- Heart disease
- Stroke
Like other insurance policies, long-term disability insurance specifies the claim events it will cover. If an employee’s illness or injury does not meet your insurance company’s definition of a disability, they may be ineligible for benefits. For example, your policy may not pay benefits for disabilities caused by a pre-existing condition, like an existing mental health disorder.
If you’re concerned about finding a policy that will cover employees when they need it most, InSource can help you evaluate coverage exclusions from different carriers.
Who Needs Long-Term Disability Insurance?
Many young, healthy employees assume that long-term disability insurance isn’t worth the cost. But according to the Social Security Administration, a 20-year-old worker has a 25% chance of becoming disabled before retirement age.
If your employees couldn’t pay for their mortgage, student loans, groceries, childcare, auto loans, and other expenses for months or even years without a paycheck, they need long-term disability insurance. No one can predict when a life-altering injury might occur, and insurance is an affordable way to ensure that employees don’t lose their sole source of income.
Give Your Employees the Essential Benefits They Need
Your employees keep your company afloat. If you want to return the favor during a stressful medical event, partner with InSource for long-term disability insurance today.
What Are My Long-Term Disability Requirements?
Employers and employees must meet specific criteria to purchase and qualify for long-term disability insurance.
Requirements for Employers
No laws state that an employer must provide long-term disability insurance to their employees, but many choose to do so anyway. Offering a comprehensive employee benefits package with disability coverage is a great way to attract talented employees and keep the ones you already have on board.
If you want to buy a group policy for your company, you will generally need at least 10 employees to enroll in coverage. You can impose a waiting period before full-time employees become eligible or offer coverage immediately. Covering 100% of long-term disability insurance premiums is a great way to encourage participation, but you can also split costs with your employees. If you’re unsure how much you want to contribute, the employee benefits team at InSource can help you decide.
Requirements for Employees
To qualify for long-term disability insurance benefits, employees must meet their policy’s elimination period and provide proof of a disability covered under their policy. Many insurance companies also limit coverage to full-time employees. After they file a claim, injured employees typically must provide proof of ongoing care to continue receiving benefits.
If an employee suffers a work-related injury covered under workers’ compensation insurance, they will most likely be required to file a claim. Depending on their workers’ compensation payments, they may become ineligible for long-term disability benefits. Additionally, most policies mandate that employees file for Social Security Disability Insurance (SSDI). If an employee begins receiving SSDI payments, your long-term disability carrier may reduce their weekly or monthly payments.
How Much Does Long-Term Disability Insurance Cost?
Insurance companies calculate long-term disability insurance costs based on several factors, including:
- Number of participants: If you have a large group of employees participating in your plan, you will likely pay less per person because the risk is spread out.
- Plan type: Your plan cost will depend on the percentage of salary an employee receives, the waiting period you choose, and the disabilities covered.
- Participant demographics: Your insurance company might adjust rates depending on participants’ age, gender, and disability history.
Do you want to know exactly how much you can expect to pay? Request a quote from InSource. We’ll help you pick the right benefits for your business and compare policy options from different carriers.
Protect Your Team In and Out of the Office With Help from InSource
As a business owner, you may be unsure if providing long-term disability insurance is the right move for your business. But a comprehensive employee benefits package can be just as important as the policies that protect you and your employees inside the office.
If you want to learn more about disability coverage and see what options are available to your business, InSource is here to guide you in the process. We can help determine if long-term disability coverage is worth the investment and find competitive quotes from top insurance providers.
Contact us today to take advantage of our employee benefits expertise and learn if providing long-term disability insurance is the right move for your business.
Insurance Experts
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