The Employer’s Guide to Group Disability Insurance

Group disability insurance is an important (but sometimes overlooked) employee benefit. Just how important? Research finds that 75% of employees would have trouble paying for basic living expenses after several months if they became disabled and were unable to work.

At a time when competition for top talent is high, and health and financial security are more important to employees, offering disability benefits can have a positive impact on both your organization and your workforce.

What is Group Disability Insurance?

Disability benefits help supplement a percentage of income for employees who must miss work due to an illness, injury or pregnancy. There are two types: short-term and long-term.

Short-term disability benefits can cover an employee if they are unable to work for a short period of time (typically a few weeks). Long-term disability benefits usually begin when short-term disability benefits end, and cover illness or injuries with longer recovery periods.

A Positive Impact on Business

Personal financial issues can affect employees physically, emotionally, mentally and socially. And when your employees are financially stressed, your business may suffer, too. 76% of stressed employees say financial worries have negatively affected their productivity. Financially-stressed employees are also twice as likely to look for a new job.

At the same time, 30% of American adults indicate they can’t pay an unexpected $400 bill without having to carry a balance on their credit card or borrow money. Now imagine if an injury or illness prevented them from working for an extended period of time.

Offering income protection through disability benefits is one way you can help alleviate some of this stress and help your employees in the event of unexpected circumstances.

And it doesn’t have to be expensive. Like other ancillary benefits, disability insurance can be offered on a voluntary basis where employees pay most or all of the premiums.

Financial Protection for Employees

Sadly, more than 25% of today’s 20-year-olds will become disabled before they retire. Some of the most common causes of disability include arthritis, back pain, cancer, diabetes and heart disease.

Disability insurance can offer valuable benefits across generations. Baby boomers, for example, are focused on protecting their retirement savings. They’re also more likely to suffer a disability as they age. Millennials and Gen Z, on the other hand, are likely earning less income than their older counterparts and may be less likely to have money set aside for emergencies.

Help Employees See the Value

The most frequent reasons consumers give for not buying disability insurance are a lack of knowledge and indecision.Consider these tips to help your employees understand the value of this important benefit.

- - - - Prioritize education. Outline how disability benefits work, who pays for them, the tax implications and how short-term disability can be used during maternity leave (especially if you don’t offer paid leave).
        
        Reinforce the need. Include statistics on the likelihood that a person will become disabled during their lifetime.
        
        Use real-life scenarios. Share examples of people who benefited from disability insurance.
        
        Consider auto-enrollment. Employers that auto-enroll employees in voluntary disability plans may get 75% of employees to participate, compared with only 30% for those that leave it completely up to employees.

As an employer, offering disability benefits can be a powerful retention tool and a simple, low-cost way to support your employees’ financial well-being, strengthen your overall benefits package and attract new talent.

^{Underwritten by Renaissance Life & Health Insurance Company of America, Indianapolis, IN, and in New York by Renaissance Life & Health Insurance Company of New York, Binghamton, NY. Both companies may be reached at PO Box 1596, Indianapolis, IN 46206. Products may not be available in all states.}

^{About Renaissance}
^{Renaissance Life & Health Insurance Company of America and its sister company Renaissance Life & Health Insurance Company of New York offer ancillary benefits for employer groups and individuals nationwide. Dental, vision, life and disability insurance comprise the core line of the company’s ancillary benefits solutions. With headquarters in Indianapolis, Ind., Renaissance is focused on providing its members and partners with outstanding products and service. Visit www.renaissancebenefits.com, and find us on Facebook, LinkedIn and Twitter.}

About John Feeney

John Feeney has written 2 posts in this blog.

John Feeney is vice president, group sales and market development for the Renaissance Life & Health Insurance Company of America. With more than 30 years of sales and training experience, Feeney has a robust background in marketing employee benefits for organizations of all sizes.