Disability Insurance – Protecting the Financial Livelihood of Your Employees

As a business owner, you value each employee that works for you. You want the best for everyone that positively impacts your business. What if, though, one of your employees experienced a life-changing event – such as an injury or illness – that negatively impacted their ability to work?

It has been established that over 63% of all adults in the United States would experience severe hardship if they missed just one paycheck. If you obtain disability insurance for your employees, they will receive a portion of their pay if they are forced to take time off for short periods of time due to a disability.

What Is Disability Insurance?

Disability insurance is a specially designed insurance product that aids employees by providing income in the event that the person is unable to work and earn their normal income due to some type of disability. This type of insurance may be obtained through both private and public programs. 

What Affects the Cost of Disability Insurance? 

There are numerous variables that have a direct impact on the cost of disability insurance. These include the requirements of the plan, the amount of the income that is going to be replaced, the length of time that the benefits will be paid to the individual, and the length of time that is required for the individual to wait before they can start to collect the benefits.  

Who Can Be Covered? 

Disability insurance may protect employees, those in executive positions, and the owners of a business. 

Premium Payment Options 

There are many different premium payment options. In most instances, these result in tax benefits to the owners of a business. In other instances, there are voluntary plans that result in no cost to the employers. The payment options are as follows:

  1. Employer Paid– The total of 100% of the premium of the insurance plan is paid directly by the employee. 
  2. Voluntary– The total of 100% of the premium is directly paid by the employee. 
  3. Contributory– Both the employer and the employees each contribute to the overall cost of the premium.
  4. Supplemental– This is paid by the employer and the employees also have the opportunity to directly purchase additional coverage for themselves and/or their dependents. 

Short-Term and Long-Term Disability 

There are two types of disability insurance available. These include short-term and long-term. If you want to protect your employees, it is important that you offer both. The following outlines the differences between the two:

  1. Short-Term Disability Insurance– This protects employees if they are unable to work and experience a short-term loss of income from an illness or an injury. It only provides benefits for a short period of time.
  2. Long-Term Disability Insurance – This covers anything after the coverage from short-term disability ends. It helps employees that are unable to work and experience a loss of income for a long period of time. 

Contact Us 

If you have an interest in disability insurance or other types of insurance coverage for your business, contact us here at Modica Associates today. We will develop a solid partnership with you to ensure that your company is properly protected and on all levels. You may reach us today by calling: 718-855-1836

Recent Posts