The benefits of group disability insurance for businesses
While disability insurance is an ideal way for employees to protect themselves in case injury and/or illness prevents them from working, it’s also ideal for employers. Most companies and businesses offer disability insurance to their workers and a good low-cost alternative to individual plans is to opt for group disability insurance as it has several benefits.
If you’re an employer and operate a company with between 10 and 499 employees, group disability insurance is generally considered to be a good option. Most types of group disability plans will usually provide employees who are off of work up to about 60-70% (per cent) of their regular income to a specified maximum amount.
Employers can offer coverage for long term disabilities as well as short term ones and can often do it without the need of medical evidence of insurability. Running a business and offering your employees a solid group disability insurance plan should help you attract quality employees and keep them. The plan is also tax deductible for the business. Tip: You may or may not wish to tax deduct. It’s usually good business wise and MOST do elect to opt in taking the tax credit, but, if so the benefit may also be paid out to the employee, but taxed. So discuss with an agent or accountant.
Long term group disability insurance is attractive to workers as it pays monthly benefits to those who are partially or totally disabled by an illness or injury that’s covered under the plan. There are several plans you can use and they typically range in time for two years, five years, and plans that cover employees until they reach the age of 65. They generally have elimination periods that range from 30 days up to two years. The premiums are also very reasonable.
The percentage of income they cover and the maximum amount will vary with different policies. These plans are ideal for employees who may not be able to work again or have used up their short term plans and are absent from work for an extended period of time.
With short term group disability insurance, it provides weekly benefits to employees who aren’t able to work because of illness, injury, mental disorder, or pregnancy. The benefit period will also vary with most policies covering 26 weeks, but some offering up to a year. There’s usually a waiting period of one to two weeks before the benefits start. The percentage of income coverage and maximum will also vary in a short term policy.
Group disability insurance can be paid entirely by the employer or you can share the costs with the employees. It’s a great way for employers to enhance the well-being of the workforce. The plans will also help to alleviate the administrative burden, maximize the opportunity to return people to work when it’s appropriate, and minimize interruptions to the business. Offering group insurance also affords your employees the comfort and peace of mind of being protected and covered by a business that has stability and financial strength.
There are many different types of group disability insurance for businesses to look into and compare before deciding on which one suits them the best. Feel free to contact us for any questions.