Group Long Term Disability

"BenefitsMart has been serving our employee benefits needs since 1994. I would recommend Jean and Benefitsmart to anyone who would like to improve benefits programs for employees while maintaining a sensible cost structure."

Bill Kotek
President
Raffi & Swanson

A group Long Term Disability (LTD) plan is a convenient, effective way for companies to protect their employees and their bottom line. The likelihood of becoming disabled is a reality many people don’t like to think about. Before normal retirement age, one out of every five workers will be disabled for five or more years. And this issue is growing. Today, for someone age 35, there is more than a 50 percent chance they will be disabled for 90 days or more before they reach age 65* (Solutions, Feb. 1995)

The impact of a disability on an individual can be devastating. A disability drains an individual’s emotional and financial well being. The average employee can only meet everyday expenses such as rent, mortgage, credit cards and utilities for approximately three months following a disability. In fact, nearly half of all mortgage foreclosures are due to a disability * (Mortgage Foreclosure in the U.S., Housing and Home Finance Agency, U.S. Government)

Group Long Term Disability insurance is an excellent way for companies to protect their employees if an employee becomes disabled for a long period. With a good disability plan in place, it will actually assist employees to return to a productive lifestyle.

Long-Term Disability is offered with a waiting period before an employee can be eligible to collect for the loss of earnings. Employees have to meet the definition of disability under the insurance contract, typically employees have to be partially or fully disabled from doing their job. Group LTD programs have a waiting period before benefits begin. This waiting period is typically from one month to one year. After the waiting period, LTD plans provide benefits to disabled employees due to illness or an injury until the time that they are able to return to work. But benefit payments for LTD usually end at retirement age and cease earlier if the disabled employee should die.

The amount of income replaced by LTD benefits usually is based upon gross salary, with a monthly maximum. Income is replaced based on a percentage of gross income to the monthly maximum.

There are many bells and whistles to the LTD plans. Insurance companies are constantly updating and enriching the plans to make themselves more competitive in the competitive LTD market.

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