Disability Income Replacement
Short Term Coverage
Short term disability insurance is a type of insurance that pays a percentage of an employee’s salary for a specified amount of time, if they are ill or injured, and cannot perform the duties of their job. MA and RI disability insurance coverage usually starts anywhere from one to 14 days after your employee suffers a condition that leaves them unable to work. According to certain Massachusetts disability laws and expectations, employees are often required to use sick days before short term disability kicks in, if it’s an illness that keeps them out of work for an extended period of time. This is why there is usually a different policy for short term disability for sickness versus an injury.
Long Term RI and MA Disability Coverage
Long-term disability – Some experts contend that long-term disability insurance is the most important insurance you can purchase. This can be partially attributed to advances in medical care; some diseases and injuries are now disabling rather than deadly, meaning that the incapacitation can be lengthy.
Typically, long-term disability insurance can be purchased to replace 50-70% of salary. Some employers allow employees to purchase extra insurance from the same company, sometimes raising the total to 80%. Note, however, that some disability policies have monthly maximum payouts, which may reduce the actual percentage of salary the policy owner receives. The “salary” is setat the time the policy is purchased, and you will likely want to increase the value of the plan as your compensation increases. Some plans only allow increases with a physical, some allow increases without a physical for the first few years of the plan, and some have other rules; check the plan for its particulars.
Long-term disability insurance policies vary in the length of payout: some policies will only pay out for 5 or 10 years, some will pay out until age 65. Experts recommend the latter. Policies also vary in definition of disability (some contentious categories include mental illness and back injuries) and exclusionary criteria (pre-existing medical conditions, injuries from dangerousactivities, etc.).
MA and RI disability insurance policies can be ‘guaranteed renewable’ and ‘non-cancelable.’ Guaranteed renewable means the insurance company cannot drop the policy, unless premium payments are skipped. Non-cancelable means the insurance company can never raise the premium on the policy. Both are desirable, but non-cancelable is usually best.
Lapointe offers both short-term and long-term disability coverage through qualified employer plans. Contact your account manager for additional information.