Financial advisors will tell you that the ability to earn an income is your most valuable asset. That’s why disability insurance is an important benefit for an individual to have, but more importantly – for companies to offer to their employees. There are two types of disability coverage an employer can offer.
Short Term Disability
Short term disability (STD) insurance protects 40-60% an employee’s regular wages if they have an injury or illness that is relatively short. Depending on the policy, STD provides between nine to 52 weeks of coverage.
Long Term Disability
Long term disability (LTD) insurance is arguably the most important of the two coverages to have because it provides long term income replacement should an individual become unable to work due to a debilitating illness or injury. Depending on the policy, it covers 50-70% of regular income and it kicks in when STD coverage ends. Policies vary, but this could be for 5 to 10 years, or as long as the employee is disabled until they hit the retirement age of 65.
In surveys regarding benefits offerings, employees consistently rank disability insurance as one of the most important. To attract and retain top talent, companies must offer a full array of benefits to their employees, and disability insurance should not be overlooked.