February 22, 2012
Group Disability Programs provide income replacement for your employees in the event that they cannot work due to illness or injury. Disability Programs are designed to assure that your employees can continue to pay their bills and focus on recovery instead of worrying about how to make ends meet. Short Term Disability Programs typically provide protection for periods of 30 - 90 days, while Long Term Programs can provide up to 66% of salary for periods of two to five years - or even until age 65. Voluntary plans are offered to employees at little or no cost to the employer, or Companies can choose to contribute to the premium expense on behalf of their workers.
The U.S. Census Bureau estimates that workers have a 20% chance of becoming disabled at some point during their working lifetime. The most common causes of Long Term (greater than 90 days) disability include cancer, back or spinal injuries, complications from pregnancy, accidents, and heart disease. The average long term disability lasts 2.5 years. Most employees (estimates are as high as 71%) live from paycheck to paycheck, with little or no savings to fall back on in the event they can no longer earn the paychecks on which they depend. Despite these sobering statistics, the Social Security Administration estimates that 70% or workers have not invested in a Personal Long Term Disability Policy.
Workers Compensation and Social Security are not typically viable alternatives: only an estimated 1 in 10 disabling injuries are work related. The average Social Security Disability Insurance benefit is slightly more than $1000 a month - plus fewer than 50% of those that apply for these benefits are approved.
Group Disability plans may be the single most important benefit you provide to your employees other than Group Health Insurance. Group plans typically have limited underwriting requirements - or none at all - meaning all of your employees will qualify for coverage. Some plans allow your employees to convert their Group coverage to an Individual Policy if they move on - which can be a huge benefit for attracting new employees.
Some criteria we consider when recommending a Group Disability program for our clients:
