Group disability insurance is a policy for a company, group, or organization which is meant to provide compensation for its employees if they are unable to work and unable to get paid because of a disability.
With disability insurance a key employee perk, your benefit package becomes even more competitive. As we stated above, promoting this benefit will help your company recruit and retain talented team members. Many people who have endured temporary disabilities credit the relief that financial protection ensures for helping them focus on recuperating and resuming productive lives.
When businesses and workers weigh individual components in their employee benefit packages, many do not realize the importance of disability insurance. Countless people consider their largest assets to be their homes without realizing that staying in their home requires insuring their future income. Unexpected serious illnesses or injuries might leave your valuable employees unable to bring in wages.
For employees making $100,000 per year with 30 more working years until retirement, that could amount to a colossal $3 million in lost earnings. Not insuring that much potential income could be a very expensive mistake. When job compensation funds employees’ lifestyles, any losses ― from temporary to permanent ― could be devastating financially. Since disabilities may last months to years, having guaranteed monetary resources during any non-work periods can be extremely valuable.
Two insurance types are available. One’s “own-occupation” coverage is considerably better since it defines “total disability” as one’s inability to perform his regular job. The second option, “any-occupation” coverage, outlines that condition as one’s ability to execute any job’s duties. So disabled employees who could handle less-demanding jobs might not receive benefits. Some plans use own-occupation criteria for the benefit period’s initial two years. Then they switch over to follow any-occupation standards. Offering various coverage amounts will allow employees to choose the most suitable options for their unique family and financial situations. Usually, plans pay insureds some percentage of their monthly earnings when they’re unable to continue working. Personnel with dependents may select plans that cover 60 or more percent of their pay. Policies that replace 50 percent of salaries may be sufficient for singles without kids and mortgages. Plans with benefit caps might cover 60 percent of gross pay without exceeding $3000 per month.