Overview Of Long-term Disability Insurance Cover
It is a critical situation for a company when they have to pay long-term disability insurance cover to its employee because the disability may even last for a lifetime. These days, a number of companies do not have such provisions for their workers. Instead they offer a short-term insurance cover that lasts for a certain period of time or nothing at all. According to statistics, 30-40% of workers between the groups of 25 to 60 years suffer from some kind of injury or illness and this percentage include both short-term and long term disability. Therefore it is a great benefit when a company still has a long-term disability insurance policy in place.
When to avail long-term disability insurance cover?
Over 60% individuals suffer from an injury or accident when they are not at their workplace. Therefore worker compensation policy will not be of help. In the initial stages, any worker gets a short term insurance cover to recover the lost salary lasting for 6 months to 2 years. Unfortunately, by then if the person still hasn't recovered from the injury or illness, and the short-term policy already expired, he can avail the long-term insurance cover. This is when long-term disability insurance has a big role to play. This kind of disability insurance enables a person to get a part of their salary as they are not able to go to their workplace anymore.
Who pays for long-term disability insurance cover?
The ways in which long-term disability insurance policies are offered today have witnessed a huge transformation from that of the past. Earlier, many more employers opted for this type of cover for their employees at reasonable rates. Today, as most organizations have stopped offering long-term disability insurance cover, the insurance companies ensure that it can come from either the employer, employee or from both in the form of a shared cost. The employer has to select how much percentage of the employees' salary can be provided and also the time duration of the payment. Most companies pay for a period of 5 years and some may even extend it up to 10 years depending upon the nature of disability. In long-term disability insurance cover, an employee receives 50-65% of his base salary, paid on a monthly basis.
How to avail long-term disability insurance?
Everyone is not entitled long-term disability insurance. To avail a long-term disability insurance cover, an employee must complete a certain period of time at the workplace. Ideally, he should apply for the long-term disability insurance when he is already under the short-term cover. It is during that period that he has to decide whether a long-term disability cover is required. He can avail the cover anywhere between 3 months and 6 months after the injury or illness has occurred. In the U.S for example, the applicant has to meet the standard criteria of the Social Security Administration. This includes personal information of the employee including his family information, bank account information, salary and earning and occupation, among others. This system prevails elsewhere as well.
Long-term disability insurance is helpful in the sense that it enables the employee and his family to cover medical expenses as well as the loss of income during the time he is unable to work.