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Group long-term disability (LTD) insurance plans are designed to provide essential protection in the event of an extended illness or injury, ensuring that your team members can maintain financial stability during challenging times.

What is Group Long-Term Disability Insurance?

Group long-term disability insurance is a type of coverage that provides income replacement benefits to employees who are unable to work due to a qualifying disability lasting beyond a specified waiting period, typically 90 days or more. This insurance helps replace a portion of the employee’s lost income, providing crucial financial support during a period of incapacity.

Key Features of Group Long-Term Disability Insurance Plans

  • Benefit Structure: Group LTD insurance plans typically provide a percentage of the employee’s pre-disability income as a monthly benefit, up to a specified maximum. This benefit is payable after the completion of the waiting period and continues for the duration of the disability or until the employee reaches retirement age, as defined by the policy.
  • Definition of Disability: The definition of disability varies among insurance providers but generally refers to the inability to perform the material duties of one’s own occupation or any occupation for which the employee is reasonably qualified by education, training, or experience. Some policies may also include provisions for partial disability benefits.
  • Integration with Other Benefits: Group LTD insurance may coordinate with other sources of income replacement, such as workers’ compensation benefits. This coordination ensures that employees receive the maximum allowable benefits without duplication or overlap.

Why is Group Long-Term Disability Insurance Important?

Income Protection

Group LTD insurance provides employees with a safety net in the event of a long-term illness or injury that prevents them from working. It ensures that they continue to receive a portion of their income, allowing them to cover essential expenses such as mortgage payments, utility bills, and medical costs.


Employee Retention and Recruitment

Offering group LTD insurance demonstrates your commitment to the well-being of your employees. It fosters a sense of security and loyalty among your team members, contributing to higher job satisfaction and retention rates. Employees are more likely to commit to, and remain with, employers who provide comprehensive benefits that support their financial security.


Cost Savings

Group LTD insurance plans are typically more cost-effective than individual policies due to group purchasing power and streamlined administration. By offering this coverage to your employees, you can provide valuable protection at a reasonable cost to both your organization and your team members.


Choosing the Right Group Long-Term Disability Insurance Plan

Selecting the right group LTD insurance plan requires careful consideration of your organization’s needs, budget, and employee demographics. It’s essential to work with an experienced insurance broker who can help you evaluate your situation and provide the best options to design a plan that meets your objectives.

At Barnett & Associates, we specialize in providing tailored group long-term disability insurance solutions that prioritize the financial security of your employees and their families. Contact us below to learn more about our offerings and how we can support your organization’s needs.

Group Long Term Disability Insurance: Questions and Answers

Coverage applies to any condition that falls under the stated definition of disability in the contract.

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.

Your monthly benefit amount is determined by the percentage replacement formula and any plan maximums that your coverage has.

The great part of Group Long Term Disability is the ability to get coverage up to certain levels regardless of an individuals health. Although, plans generally have a 12 month pre-existing exclusion. This means that if someone has a pre-existing condition, and becomes disabled due to that condition within 12 months, they may not get coverage. If they become disabled due that condition after 12 months, they will get coverage.

Benefits can continue for the purchased benefit period which tend to be 2 years, 5 years, or 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.  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.