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Long- and Short-Term Group Disability Insurance 

Group disability insurance protects employees' most valuable asset - the ability to earn an income - even if they are too sick or hurt to work. An employer can offer two types of disability insurances to their employee: short-term and long-term.

Long- and Short-Term Group Disability Insurance Questions & Answers

Does disability insurance cover all disabilities?

Every plan will have its definition of disability, so you’ll need to review which types of disabilities qualify in your particular policy. In general, many policies do not provide coverage for the following disabilities:
• Injuries or disability due to riots or war
• Injuries that are intentional and self-inflicted
• Disability incurred during incarceration or while
committing a crime
• Pre-existing conditions (definition varies by policy)
• For short-term disability: occupational sickness or
injury (as Worker’s Compensation policies
generally cover these types of disabilities)

 

Is there a limit on group disability insurance?

Disability insurance policies are designed to partially replace your employees’ income if they become
disabled and cannot continue to work. To help limit the number of fraudulent disability claims, insurers typically will not cover 100% of the lost income and most group disability insurance policies will only cover up to 60% of the insured's earned income.

 

How long does long-term disability insurance last?

Most long-term disability insurance policies pay out for two, five, or 10 years, or until retirement, and a five-year benefit period is typically enough to cover the most common disabilities. According to the Council for Disability Awareness, the average individual disability claim lasts for a little under three years.

Short-Term Disability Insurance 

An accident or illness that leads to disability can cause significant financial hardship. Short-term disability insurance can help you and your employees continue providing for your families if you are unable to work. Our employee benefits experts and insurance specialists can help you understand the regulations governing short-term disability insurance and your options for providing additional levels of coverage.

For example, if your business is located in NJ or NY, state law requires you to provide a certain amount of minimal coverage for the first 6 months the employee is unable to work. However, the established amount typically covers only a small percentage of the employee’s regular income, so you may choose to provide supplemental insurance (up to 60% of total salary). If your business is located outside NJ and NY, you may select a complete short-term disability plan for your employees.

Both options allow you to give your employees peace of mind, knowing that they can count on a meaningful level of income replacement in the event of an unexpected health problem.

Long-Term Disability Insurance

Unfortunately, short-term disability coverage may run out before your employee is able to return to work. An employee who remains disabled after 6 months may be left without any source of income, unable to provide for his or her family and facing potential financial ruin.

A private long-term disability insurance policy can be the ideal solution for your business and your employees. Our benefits planning experts and insurance specialists can provide practical, independent advice on the many variations in long-term disability policies and custom-design a group plan that meets your specific needs.

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