Long-Term Disability Insurance
...Why Should Your Business Offer
Long-Term Disability Insurance?
1. Protect employees' finances.
If an employee becomes ill or injured and is unable to work, having long-term disability insurance can help protect their finances. Without this safety net, employees may struggle to pay for medical expenses, everyday living expenses, and other bills. Offering short-term and long-term disability insurance can make a huge difference for employees in case injury or illness causes them to miss work.
2. Attract and retain employees in today's competitive job market.
It's important for employers to offer a comprehensive benefits package that includes LTD insurance to attract and retain top talent. If an employer doesn't offer LTD insurance, employees may seek employment opportunities elsewhere that do offer this benefit. When employees feel valued and supported by their employer, it can improve their morale and job satisfaction. Offering LTD insurance is one way to show employees that their employer cares about their well-being and is invested in their long-term health and financial security. This can lead to increased loyalty, productivity, and job satisfaction.
Examples of How Long-Term Disability Insurance Helps Employees.
Example 1
Let's say an employee named John is in a serious car accident and suffers an injury that prevents him from returning to work for an extended period of time. John has a long-term disability insurance policy through his employer that pays out 60% of his pre-disability income. Prior to the accident, John was earning $4,000 per month. Once John has met the policy's waiting period, which is typically 90 days, his long-term disability insurance payments would begin. Since John's policy pays out 60% of his pre-disability income, he would receive a monthly benefit of $2,400 from the insurance company. This benefit would continue until John is able to return to work or until the policy's benefit period expires, which is typically until age 65. By receiving this benefit, John can use it to cover his everyday living expenses while he's unable to work, such as mortgage or rent payments, utilities, groceries, and medical bills. This can provide much-needed financial support during a difficult time, allowing John to focus on his recovery without worrying about how he'll pay his bills. Please note that the short-term disability benefit can be taxable or tax-free to employees (depending on how the employer set up the plan).
Example 2
Let's say an employee named Sarah is diagnosed with a chronic illness that requires ongoing treatment and prevents her from returning to work for an extended period of time. Sarah has a long-term disability insurance policy through her employer that pays out 60% of her pre-disability income. Prior to her illness, Sarah was earning $5,000 per month. Once Sarah has met the policy's waiting period, which is typically 90 days for illnesses, her long-term disability insurance payments would begin. Since Sarah's policy pays out 60% of her pre-disability income, she would receive a monthly benefit of $3,000 from the insurance company. This benefit would continue until Sarah is able to return to work or until the policy's benefit period expires, which is typically until age 65. By receiving this benefit, Sarah can use it to cover her everyday living expenses while she's unable to work, such as mortgage or rent payments, utilities, groceries, and medical bills. This can provide much-needed financial support during a difficult time, allowing Sarah to focus on her health and recovery without worrying about how she'll pay her bills. Please note that the short-term disability benefit can be taxable or tax-free to employees (depending on how the employer set up the plan).
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