Why Disability Insurance Matters
Your employees ability to earn a living is often their greatest financial asset. But what happens if an illness or injury suddenly prevents them from working?
Disability insurance protects their income when the unexpected happens. Without it, they could face serious financial hardship—especially if they don’t have significant savings, don’t qualify for Social Security Disability Insurance (SSDI), or have loved ones depending on their income.
The Social Security Administration reports that 1 in 4 people in their 20s will become disabled before reaching retirement age. And it doesn’t take a major accident—common conditions such as back injuries, chronic illnesses, or mental health challenges can keep someone out of work for weeks, months, or even years.
Types of coverage:
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Short-Term Disability (STD): Covers a few weeks up to 6 months; typically replaces 60–70% of your gross income.
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Long-Term Disability (LTD): Starts after STD ends; may last 2 years to life depending on the policy; usually replaces 40–60% of income.
Employer Coverage and Benefits
Make sure your employees know that if you offer disability insurance, it’s usually a smart move to enroll. These can be employer paid or voluntary. Group policies often provide:
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Lower rates
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No medical underwriting
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Easy sign-up during open enrollment
How STD and LTD Work Together
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Short-term disability benefits pay first.
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If you’re still unable to work after STD ends, long-term disability benefits may begin (often after a short waiting period).
The Bottom Line
Disability insurance provides a critical safety net during life’s most vulnerable moments. Knowing your team is financially protected allows them to focus on what matters most—recovery and rebuilding.
And while salary continuation might seem like a generous gesture from employers, it often raises compliance concerns and potential discrimination risks. Beyond that, it’s typically more cost-effective to provide a disability policy and have the carrier pay the employee directly—rather than the employer creating and funding a salary continuation plan.
