If you are injured while skiing and can’t work for eight weeks, how will you pay the bills? If you develop a serious illness and can not work for six months to a year, what will you do? Will the government take care of you?

Many organizations spend a lot of money purchasing health insurance for their employees. Sometimes, dental and vision are added to make the benefit package more attractive. If your employees need the income they earn while working, you probably should also purchase disability income insurance. Statistics say that one in three working Americans will become disabled for 90 days or more before age 65. The average disability absence is 2.5 years.

Long Term Disability (LTD) is the first policy most organizations consider. The waiting period or deductible is 90 days or 180 days. Most policies pay 60% of the employer’s salary after the waiting period is satisfied. The employee must be disabled and unable to work due to a covered sickness or injury.

After purchasing a LTD policy, the next problem for the employee is how to get by without a salary for three or six months. Most of us don’t have that much vacation and sick pay to cover such a long period. The alternative is for the organization to also purchase Short Term Disability (STD). This policy also pays 60% of the employee’s salary. However, it starts paying immediately if you have an accident or on the eighth day if it is a sickness. Benefits will be paid for 13 or 25 weeks depending on the LTD policy that was chosen.

The definition of disability in your policy can determine whether or not you receive benefits. The three basic definitions are:

• Own-occupation. You are unable to perform the duties of your own occupation. Usually, that will be the job you were performing at the time of your disability.
• Income replacement. Similar but less comprehensive than own-occupation. Unable to perform the duties of your occupation and you are not currently engaged in any other occupation.
• Gainful occupation. You are unable to perform the duties of your occupation or any other occupation that you are considered to be reasonably qualified for by way of education, skills or training.

Social security disability payments are limited to disabilities expected to last at least 12 months or end in death. To qualify, you must be unable to engage in any type of work. Disability income insurance provides replacement income to individuals who are unable to earn income from work as a result of an extended illness or injury.

Insurance policies are available to groups with three or more employees. Smaller groups are required to submit medical evidence and will have pre-existing condition exclusions. To get a quote, you must supply an employee census that includes gender, date of birth, occupation and annual salary. Contact Nonprofit Resources for additional information.

At Nonprofit Resources, our insurance programs offer a wide range of competitively priced plans. Remember, profits earned by Nonprofit Resources are used to support Colorado Nonprofit Association programs. Please contact us when you are purchasing insurance for your organization. You can reach us via phone at 303-894-0298 or toll-free at 866-537-1142.