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Business Disability Income Expense

Disability insurance is often used by businesses as an effective tool for their protection planning strategies. Disability income insurance can help replace a portion of an income, either an owner’s or an employee’s, should they become too sick or hurt to work. For many employers, offering supplemental individual disability income insurance to employees is a great way to help you recruit, reward, and retain the valuable contributors of your organization.

Group Short Term Disability Income Insurance

Short-term disability (STD) coverage provides disabled employees with a specified percentage of pre-disability income—typically 60 percent—once sick leave is exhausted. The duration of STD coverage varies, but is typically not more than six months. Many of the conditions that trigger payment of short-term disability benefits, such as pregnancies, strains, and sprains, resolve quickly and the employee is frequently able to return to work before benefits are exhausted.

Employer sponsored short term disability programs are for non work related disabilities. They provide a partial income protection. The chance of that an employee becoming disabled and unable to work for a short period is higher than the chances of becoming totally and permanently disabled. Therefore, short term disability insurance is a more common group disability benefit than long term disability.

Like other employer paid group benefits, an employer's short term disability program may not cover all employees. Groups may be established by job classification. Eligibility may require an employee to work at least 30 hours per week, and to have been employed for a certain period of time. Short term disability coverage usually has an elimination period of eight days. Common benefit pay-out periods pay to a maximum of 26 weeks for each period of continuous disability at 2/3 of the insured employees income.

Group Long Term Disability Income Insurance

Typical group long-term disability (LTD) benefits start when sick leave and short-term benefits are exhausted, replace about 60 percent of pay, and continue anywhere from five years to the remainder of an individual’s life. LTD insurance is generally considered protection against a catastrophic illness or injury, but many long-term disability claims result from common medical conditions that cause an increasing level of impairment over time, such as heart disease, musculoskeletal and connective tissue conditions, hypertension, and diabetes.

Group long-term disability insurance can provide the means for your employees to be able to sustain themselves financially should disability take them out of the workplace for an extended period of time.

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First Infinity Coverage Group, Inc. • Insurance and Financial Services
1400 Wantagh Avenue • Suite 101 • Wantagh, NY 11793
T 516.882.1226 • F 516.804.6445 • E

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