Long-term disability coverage is an important employee benefit. The
protection it provides to employees is invaluable.
Many people mistakenly believe Social Security will cover them or their
employees if they become disabled. However, the definition of disability to
receive Social Security benefits is very stringent.
Read more about SSI disability here.
Private insurance can provide a measure of protection when Social
Security doesn't. It can also be used to "fill in the gaps."
Here is some key information about LTD:
- Most LTD policies have 90-day elimination or wait period.
- Most group policies are employer paid, but voluntary plans are also
available.
- Policies are normally structured to pay benefits to age 65.
- Most policies pay 50-60% of income, with a cap on the monthly benefit.
We recommend that all business owners carry some personal disability
insurance to protect their income. There are also "overhead" policies that
can help keep the business itself stay solvent during a disability.
Forty-five percent of small employers who offer disability coverage have
had personal experience with disability, in their own lives or an employee -
they know!
