Disability insurance provides essential financial protection for employees who cannot work due to illness or injury. There are two types of disability insurance employers can offer their employees: short-term disability (STD) and long-term disability (LTD). While both types of insurance provide essential benefits, they have distinctly different features. Consider what you need to know about short-term and long-term disability insurance, and why these forms of insurance can be a pivotal part in your benefits package.
Short-Term Disability Insurance
Short-term disability (STD) is designed to provide income replacement in the event of an accident or illness leaving an employee temporarily disabled and unable to work. In most cases, STD policies cover a maximum of 26 weeks of income replacement, though some states may require coverage for up to 52 weeks. STD policies usually do not require a waiting period before benefits kick in—in other words, coverage starts immediately upon having the policy in place—and may also include benefits for maternity leave.
Long-Term Disability Insurance
Long-term disability (LTD) provides income replacement for an employee who cannot work due to a serious injury or illness over an extended period—generally more than six months. LTD policies typically have waiting periods ranging from 30 days to one year before benefits begin, depending on the policy. The employer often determines the length of coverage, but it usually lasts until age 65 or 67 if the employee remains disabled throughout this period. LTD policies may also include provisions for the cost of living adjustments and job retraining should the employee be able to return to work at some point after being disabled.
Understanding the Differences Between Long and Short-Term Disability Insurance
Overall, short-term and long-term disability insurance are essential tools employers can use to protect their employees while offering them financial stability during times of hardship due to illness or injury. However, employers must understand the differences between these two forms of insurance so they can choose the one to best fit their organization’s needs as well as their budget. With careful consideration and research, employers will be able to select an appropriate plan for their team members so everyone can feel secure knowing they will be taken care of should an unexpected event occur. This helps boost morale at your organization, which can ultimately lead to increased productivity.
Employee Retention Benefits (ERB) is the ideal service for employers in the Riverside, CA, area looking for top-tier disability insurance coverage. With over 120 insurance carriers to choose from and five decades of experience matching employer plans to employers’ needs, ERB ensures optimized access to the best long and short-term disability insurance options available. By leveraging our extensive industry knowledge, ERB can provide employers with tailored solutions at competitive prices. As a leading provider of employer disability policies, ERB is an invaluable resource for safeguarding employees’ future health benefits. Get in touch with our expert team of insurance specialists to learn more about our disability insurance plans.
