Group Long Term Disability is coverage that provides a monthly income in the event an employee is unable to work due to an accident and or sickness. Group disability can provide coverage up to certain levels regardless of health.
The cost is generally a blended rate based on the make up of the group. Group disability is generally provided at a dramatically lower price when compared to the cost of individual disability coverage. The ability to offer coverage up to certain levels regardless of health is a huge benefit and many employees would never be able to get coverage without this feature.
Many people say it is the best value in group benefits.
Group LTD is income protection provided generally as part of your employee benefits.
Usually it covers accident and sickness events outside of work hours that prevent you from working.
Your monthly benefit amount is determined by the percentage replacement formula and any plan maximums that your coverage has.
The plan will have a definition of disability. The definition in a group contract can vary based on the decisions made by the plan sponsor .
The great part of Group Long Term Disability is the ability to get coverage up to certain levels regardless of health. The plans generally have a 12 month pre existing exclusion to protect them from walking right into a claim but these go away with the passage of the time.
Benefits can continue for the purchased benefit period which tend to be 2 years, 5 years and to age 65 subject to the definition of disability and terms of the coverage.
Current CRA rules allow for the disability income to be tax free if the employee pays the premium and taxable if the employer pays.
The cost is determined by the factors of the group, like industry, demographics, benefits offered and the insurers internal factors on this line. In short it depends on your companies situation.
We consider the cost to be very cheap relative to the impact a long term disability would have on your financial well being. It is probably the best deal in group benefits.