Group Disability Insurance
In the event that an accident or illness prevents an employee from working for an extended period of time, the financial impact can be severe for both of you.
Disability insurance pays a percentage of the salary for a specified amount of time. Generally, the benefit pays around 40 to 60% of weekly gross income.
When Short Term Disability Coverage Starts
Coverage usually starts anywhere from one to 14 days after the employee is injured or becomes ill and can't work. The time of coverage may vary from 9 to 52 weeks from eligibility.
If the employee is out for longer than the short-term disability benefit covers, then either a long term disability plan or permanent disability kicks in. This may happen at 10 to 53 weeks from the date of eligibility. Determination for long term disability is provided by the insurance company's team of doctors and insurance analysts who carefully monitor each case.
Long-Term Disability Insurance Plan Coverage
Once the employee's short-term disability insurance benefits expire (generally after three to six months), the long-term disability insurance pays an employee a percentage of their salary, typically 50-70%.
Long-term disability payments to the employee, in some policies, have a defined period of time, for example, two-ten years. Others pay an employee until he or she is 65 years old.
Each long-term disability insurance policy has different conditions for payout, diseases or pre-exisiting conditions that may be excluded, and various other conditions that make the policy more or less useful to an employee.
Some policies, for example, will pay disability benefits if the employee is unable to work in his or her current profession; others expect that the employee will take any job that the employee is capable of doing—that's a big difference and consequential.