Part II – Know What is Covered with Your Employer-Provided Disability Benefits
Income Protection series: Part 2
DO YOU KNOW WHAT COVERAGE YOU ARE GETTING WITH YOUR EMPLOYER-PROVIDED DISABILITY BENEFITS?
Last month, we wrote about the importance of ensuring your ability to earn future income, which is perhaps your biggest asset. Disability Insurance replaces a portion of your income if you were to become sick or injured and unable to work. If you are like most Americans, your only source of Disability Income Protection is provided through your Employer Benefits Package. If you are lucky to have Disability Benefits, do you know what these benefits offer you?
If you aren’t familiar, we urge you to keep reading. As a start, let us help you by explaining 3 common Employer-provided Disability Benefits.
1. Accidental Death and Dismemberment (AD&D)
AD&D pays a one-time payment in the event of your untimely death, or you lose function of 2 or more limbs from an accident. This coverage is often confused with Disability Income insurance; however, it does not replace your income. For any injury that does not include dismemberment, you will not qualify for AD&D.
2. Short-Term Disability (STD)
STD pays you a percentage of your income for 3 or 6 months if you cannot work due to an injury or illness. In some states including New York, employers are required to provide this benefit. This state-mandated benefit is minimal for a limited amount of time. New York, for example, requires a $170/week benefit for 6 months. Think about where additional funds may come from if you are still disabled when this benefit runs out & you are still unable to work.
3. Group Long-Term Disability (LTD)
Employers are NOT obligated to provide Long-Term Disability; and, sadly, most do not. LTD Benefits gets triggered when STD ends. It pays a percentage of your compensation. If these benefits are offered, it is important to note that the features and benefits vary, must be reviewed carefully, and often have significant limitations. Be mindful that having LTD Benefits through work still does not offer you full financial protection if you become sick or injured. Purchasing an Individual Disability Income Policy may be your next step to providing more financial security.
To read Part I – Is Your Income Protected?, CLICK HERE
Contact us today for a complete review of your Employee Benefits Package to be sure you and your family’s financial future is protected properly.
Mathew Kryder, the writer of this blog, is Petschauer Insurance’s Life & Disability Advisor and can be reached at (516) 419-4266 or mkryder@jpins.com.
To request a Disability Insurance quote CLICK HERE
