the different types of Group Disability Insurance

 What are the different types of Group Disability Insurance?

There are two types of group disability benefits:

Short Term Disability

This type of insurance is designed to protect an employee from any loss of income incurred by an accident, illness or injury that temporarily prevents them from working. The policy provides the employee with a percentage of their income to help manage expenses. It does not, however, provide coverage for accidents that occur within the workplace; these are typically covered by workers’ compensation insurance instead.

Long Term Disability

Like its short-term counterpart, this policy also provides employees with protection in the event of accidents, illnesses or injuries. The main difference is that it is designed to cover an extended absence from work. Employees with long-term disability insurance generally receive between 60 and 70% of their regular income.

Both types of group disability insurance are comprised of four key components:

• Benefit period – The benefit period is the amount of time in which long-term disability benefits will be paid for. The plan can be set up with two or five years of coverage, or a benefit period that lasts up until age 65.
  
• Benefit maximum – The benefit maximum is determined by the size of the group receiving the benefits and the nature of the business. There are two types of maximums: non-evidence maximum and overall maximum.
  The non-evidence limit is the limit of insurance the insurance company will cover without evidence of good health. The larger your group, the larger the non-evidence limit will be. If your group requires a higher limit of insurance, each eligible employee will be required to show proof of good health. The overall maximum is the maximum amount of insurance the insurance provider will cover.
• Benefit schedule – The benefit schedule is the formula used to calculate long-term disability benefits. The amount of long-term disability benefits is usually calculated by a percentage of the pre-disability monthly earnings of the employee. The percentage of the pre-disability monthly earnings eligible for coverage varies and can be modified to meet the needs of the business and its staff.
• Elimination period – The elimination period is the waiting period that disabled employees must complete before receiving long-term disability benefits. This group plan can be set up with elimination periods of 105, 119 or 180 days. The elimination period options often vary based on the insurance provider.

Where can I get this plan for my staff?

Group Disability Policy is available from most licensed insurance brokers, who can also provide you with helpful information about other types of employee benefits. You can also get a FREE quote today (by clicking the button below) to get a better picture of the employee benefits landscape and find a plan that aligns with the needs of your company and its employees.