If you think you are immune to illness or injury, think again. According to Social Security Administration data, over twenty-five percent of those aged twenty or older will experience a disability that keeps them out of work for ninety days or more before they reach retirement age.
As an employer, it is important to consider this factor when creating a comprehensive benefits package. While there’s generally a small chance that someone might need this type of policy, it is crucial for the overall health and safety of a business to ensure your workers are covered. Here’s what you need to know about disability insurance and why it matters.
What is Disability Insurance?
Disability insurance is a specific type of policy that pays a portion of the policyholder’s income if they cannot work for an extended period of time due to an injury or illness. Typically, the total monetary value covered is up to a specific predetermined amount.
So, what does disability insurance cover? These funds are available for use for virtually anything needed to cover the employee while they are out of a paycheck. This can range from monthly household bills to out-of-pocket medical expenses, extra childcare costs, or even someone to come clean your house when you’re physically unable to do so yourself.
Why is Disability Insurance Important?
The idea of missing significant amounts of work and experiencing a loss of income often seems fairly minor to employees who are young, healthy and handle tasks in a fairly safe environment like an office. However, it is important to remember that disability isn’t always as cut and dry as most people believe.
According to the Council for Disability Awareness, the vast majority of those who require long-term disability claims are those with an illness -- not an injury. The top causes include:
- Muscle, joint and back disorders
- Cardiovascular diseases
- Spine and nervous system-related disorders
- Cancer and tumors
Of course, these are just a few of the many different illnesses one might encounter throughout their time as an employee. Even a significant respiratory illness, long haul COVID-19 diagnosis, or severe case of the flu could require a large amount of time away from work.
How Does Disability Insurance Work?
Most people who have disability insurance purchase it through their employers. Giving workers the option to do so is a fantastic benefit that can truly ensure the well-being and peace of mind of your staff.
Employers have the option to pay for disability coverage in full or offer it as a voluntary benefit. In the end, this gives employees the option to purchase a policy at a group rate or other discount.
Types of Disability Insurance Coverage
There are two types of coverage to consider: short-term disability and long-term disability. Both work in tandem to provide workers an option for both minor and catastrophic incidents, including those beyond their control.
- Short-term disability insurance lasts when the employee is out of work from six weeks up to six months. Typically, it covers around sixty percent of the individual’s loss of income.
- Long-term disability insurance coverage begins when the short-term period is terminated. It can last up to two years or even retirement depending on the terms of the policy contract.
While some states require employers to offer disability insurance coverage to workers, Missouri is not one of those states. Thus, it is important to companies and benefits managers to take action and consider providing this added benefit to employees, thus solidifying the health of your business in the future.
Ready to take the first step in finding the best coverage plan to offer quality disability insurance for your employees? For more information about disability insurance or to learn about current rates, please contact our team at Winter-Dent today.