The best way to guarantee an income is by getting disability coverage. Once someone cannot work due to disability, there are not many options to maintain current standard of living or to pay for necessary medical expenses due to that disability. Many people put off purchasing disability coverage because they feel it will not happen to them, at least not right away. But if it does suddenly happen, cutting off an income stream can be devastating. Some people think that Government Disability can provide enough income, if one is covered, but in reality Government Disability covers a very minimal amount.
Why Get Group Disability
The last thing an employer wants is an employee hanging on to their job by a thread just to keep their income stream going. Firing an employee is not always an easy answer and can come with legal consequences. Group Disability can help ease a very painful situation, and is also good management because it reduces any potential disruption and risks that can affect the success of a business. Lastly, as a great group benefit to offer an employee, it also helps keep the best employees loyal to the business as it can be seen as more important than a higher salary offered by a competitor.
The Group Underwriting Advantage
Group disability underwriting, depending on the size of a group, can either be more lenient or for larger groups medical underwriting may be waived. Also, in most cases pre-existing conditions are not excluded under a group policy. A group policy may be cancelled as a group, while individual policies may not be cancelled. If a policy is cancelled, there may or may not be replacement options. Group policies also tend to have more favorable pricing than individual policies. However, group policy benefits are taxed, while individual policies benefits are not taxed. You may want to consult with your CPA, though, as there may be options to structure a group policy so that the group benefits are not taxable. Lastly, group policies may not have as rich benefits as individual policies.
Group Disability coverage is a management investment decision and is an excellent choice for businesses that want to minimize risk as well as round out their benefits packages to keep and attract the best employees. In most cases, this costs a fraction of the cost of health insurance and may be the best supplemental benefit a business can offer. Since each business situation is different, it’s best to discuss this with your insurance professional on what available options exist for your business.