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.
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)
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.
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.