What Is A Group Disability Income?
SHORT-TERM GROUP DISABILITY INSURANCE
Short-term group insurance provides weekly benefits for employees who are totally or partially disabled by a covered injury, illness, pregnancy or mental disorder. Typically, short-term disability insurance is cost prohibitive to an individual. Therefore, an individual would be better off signing up for the short-term disability insurance through their employer.
LONG-TERM GROUP DISABILITY INSURANCE
Long term disability insurance (also known as LTD) is defined as insurance with an elimination period of at least 90 days. The benefit period (time when benefits are paid after satisfying the elimination period) is typically 2 years, 5 years, 10 years, to age 65 or lifetime. The longer the benefit period, the higher the premium. Long term disability insurance is intended to cover more catastrophic types of claims that last a long period of time. Group disability plans tend to have benefit periods to age 65, and typically provide the totally disabled employee with up to 60 percent of pre-disability income to a specified maximum such as $10,000/month. Coverage is available for both short- and long-term disabilities and often without medical evidence of insurability. Group disability insurance helps attract and retain quality employees and is tax deductible to the business.