Long Term Disability -
LTD
Many of our business clients,
and others, have either been acquiring or seeking information about
Group & Non-Group/Private - Long Term Disability (LTD) coverage. What
follows is a general overview of the important differences between these
two types of coverage.
DISABILITY
FACTS:
- The
incidence of Disability is much higher than death creating the risk of
financial hardship.
- Social Security is extremely difficult to qualify for, it only pays after
one year, and it does not provide adequate income replacement.
- State Disability pays only a maximum benefit of under
approx. $400 per week (based
on your highest quarterly earnings in the most recent prior 12 month "base"
period), but for only 52 weeks, after a 7 day waiting period.
- The largest contributor to Home Mortgage foreclosure is loss of income
due to disability.
GROUP
- LTD
BENEFITS TO YOUR EMPLOYEES:
- LTD
replaces 60-70% of a disabled Employee's earnings.
- LTD can be designed to pay benefits up to age 65-LTD can provide built
in Partial Disability benefits.
- LTD carriers often offer rehabilitation benefits and programs.
- LTD saves Employees money when compared to the cost of Private Disability
coverage's.
- LTD is guaranteed issue (issued usually without the requirement of medical
underwriting pre-approval, although it will not cover disabilities resulting
from a pre-existing condition until after a "treatment free" waiting period).
Guarantee Issued typically to 10+ Employee Groups.
GROUP
- LTD
BENEFITS TO THE EMPLOYER:
- LTD
premiums are Tax Deductible by the Employer.
- LTD absolves the Employer of difficult moral decisions arising when Employees
are disabled.
- LTD can relieve an Employer of expensive and possibly illegal salary continuance
practices.
- LTD is inexpensive - usually under 1-3% of payroll. For an average
25 Employee group, the total cost can be less that $300.00 per month!
We advise that it is better for you to shift the burden of this
insurance gap to an Insurance company, and immediately investigate & acquire
this
line of coverage. We have access to all major markets for LTD, and
can design programs that are appropriate for your situation. You
will be surprised by the low cost and high benefits of LTD. In this
age of tightening Social Security, and aging demographics, no one should
be without this much needed disability protection.
See
the chart below for a more in depth comparison of Group LTD to
Private/ Non-Group Disability Insurance. Both coverage's are extremely
valuable and important to have. In order of preference, and so that
you can have the greatest protection, it is best to first purchase a private
plan of coverage and then to layer on top of that additional Group LTD. Group plans typically
do NOT offset benefits, nor do they limit purchases of the maximum available
LTD benefits due to your having a private plan.
