What Are the Requirements for Long Term Disability?


By Theresa Semple 

Did you know that potential employees are more likely to work with you if you offer good insurance plans? Employees are also more likely to stay at your place of work if they like their health plan. Your staff is key to smooth and successful business operations. A critical way to ensure employee satisfaction is to provide a great employee benefits package. Both you and your employees need to stay educated on long term disability plans in the event a staffer gets injured, ill or sick. With the right insurance policy, employees don't need to worry about being on leave from your company if they are in a critical condition. Keep reading to learn more. 

What Is Long Term Disability Insurance?

Many small to mid-sized companies will offer long term disability (LTD) insurance to employees. Managing finances and supporting loved ones can be stressful during times of illness. LTD insurance ensures employees a safety net by issuing monthly payments in the case of disability. LTD coverage provides wage replacement up to 50-70% of earnings pre-illness. Employees will need to sign up during the initial enrollment period to qualify for the coverage.

How Does Long Term Disability Work?

The duration of coverage depends on the plan's policy. However, LTD coverage can last from between 5-10 years, as long as they are disabled or up to the age of 65. The coverage kicks in after 10-53 weeks of the employee being unable to work. According to the Council for Disability Awareness, numerous injuries and illnesses qualify for long term disability coverage. For example, cancer, mental health issues, accidental injuries, and nervous system disorders. With LTD coverage, either the employee or employer (or both) may pay the premium. This depends on the plan. Is long term disability taxable? It is if the employee pays the premiums. The coverage pays employees a percentage of their wages even when not working, which is non-taxable.

Short Term vs Long Term Disability

Both long term (LTD) and short term (STD) coverages offer significant benefits to employees. The difference between the two lies in the length of time an employee has insurance coverage. STD coverage allows workers to receive up to 60% of their wages, with a 9-52 weeks coverage period. It kicks in between 1-14 days after the employee is unable to work. STD insurance covers childbirth, back issues, and injuries. When would you use LTD coverage over STD? Well, if an employee's condition extends beyond the STD coverage period, they are held eligible for LTD coverage.

Use Long Term Disability Insurance to Benefit Your Employees Today!

Considering that one in four people will become disabled by the age of 64, disability insurance is crucial for every business! At Semple Solutions, we prioritize our client's best interests to find them the insurance plan that works best for them. Our team of dependable insurance experts can help you with issues ranging from retention to running rates. Want to learn more about long term disability coverage and other insurance plans? Check out the free resources on our website for tips and solutions today! 

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