Long Term Disability

When faced with an employee who's been disabled, uninsured employers have few options. Do you continue to pay all or part of a salary? Offer unpaid leave? Terminate employment? For an employer and employee, the choices can be devastating. An insured Long Term Disability plan will replace up to 66 2/3% of an employee's income up to the age of 67 in a situation where catastrophic illness or injury exists. A managed LTD plan allows an employer to outsource the difficult decisions surrounding a disabled employee to disability experts. Along with income protection, most disability plans offer rehabilitation and return-to-work services that are essential to the recovery of disabled employees. The goal of Long Term Disability insurance is to financially protect and proactively return disabled employees to a productive life.

Question & Answer

Q: How many people really use their LTD plan?

A: There is a 1 in 5 risk that a 35 year old will be disabled for 90 days or more before age 65. You are more likely to become disabled than to die during your working years.

Q: How much will LTD cost the company?

A: The general rule is that a fully insured LTD plan will cost a company about one half of one percent of the company's monthly payroll.

Q: Will an LTD plan pay a disabled employee who returns to work on a part-time basis?

A: Yes, most LTD plans will pay an employee who is limited from performing all of their job functions, and has suffered a 20% or more loss of income as a result.

Q: What are the most common income replacement percentages?

A: Most companies implement a plan that replaces 60% or 66 2/3% of an employee's income in the event of a disability. The highest percentage available is 66 2/3%.