Employer Sponsored Disability Insurance Plan

(What they are, how they work, and if they're the right call for you.)

Written by Candace Jenkins
Written by Candace Jenkins

Candace Jenkins is a licensed insurance advisor with over a decade of experience. She is also a writer and loves to write on all things insurance. Candace writes for TrustedChoice.com on a continuous basis and is here with the facts about all your insurance inquiries.

Employee sponsored disability insurance

For a lot of folks, it's their employers who provide their disability insurance. Heck, your employer might offer disability insurance that you're not even aware of. Sometimes this coverage slips past you and gets thrown into your employment benefits package and you don’t know even know about it until you need it. 

The first thing to do is to talk to your HR rep at the office to find out if you already have it or if it's even offered. Next, you need to speak with your local independent insurance agent. They've been through it all and can help you decide whether your existing coverage is enough, or if you don't have coverage, how to get it. 

And when it comes time for adding coverage or even getting a whole new policy, they'll bring you options with all sorts of coverages and prices that fit right into your budget. But before we get to that point, it's time to talk a bit more about employer-sponsored disability insurance.

What Is Disability Insurance?

Disability insurance is designed to help provide a replacement income if you become disabled, injured, or ill and are unable to work — usually between 40% and 70%. But the trick is that there are a number of different disability insurance options, and knowing the right coverage for you is easy when you've got an independent insurance agent in your corner. 

When it comes to disability insurance, you can pretty much pick your flavor of plans to suit your needs. Disability insurance gets forgotten a lot in the midst of the other insurance policies on the market. 

It’s not their fault, disability insurance is usually an afterthought. Because face it, most people fancy themselves superheros, invincible to everything, and think they'll be young and spry forever. 

It's unlikely you ever sit down and think about what could happen if you were to become injured or critically ill. These are not happy thoughts. But as unpleasant as they are, they can be a reality nonetheless, and it’s best to be proactive and prepared instead of left behind and broke. 

Individual Disability Insurance 

Individual disability insurance is, obviously, for the individual. This type of disability policy provides coverage for you when you become critically ill or disabled and are not able to work. 

  • Individual long-term disability insurance: This policy provides years, or even decades, of disability coverage due to disability resulting from a non-work-related event. 
  • Individual short-term disability insurance: This type of policy is just like its long-term disability partner, only it typically lasts for days and months rather than years. It also provides coverage for things like maternity leave and birth.
Employee sponsored disability insurance
disability income

Save on Disability Income Insurance

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Group Disability Income Insurance Plans (a.k.a. Employer-Sponsored Disability Plans)

  • Group short-term disability insurance: This type of policy is offered through your employer. That means your employer offers this coverage to the eligible group of employees, and you can choose to opt out. This policy will cover short-term disabilities, injuries, and illnesses, normally for between one and twelve months. It even covers pregnancy and birth-related leave. Normally this plan is also paid for by your employer, but not always. 
  • Group long-term disability insurance: Another employer-sponsored disability insurance plan is group long-term disability. This plan is for the long haul and typically lasts for years, and even decades. It's also offered to the eligible group of employees, and you can opt in or out.  

Government Disability Insurance Programs and Benefits

Not only do many employers offer disability insurance, but the government does as well, on both the state and federal levels, with programs like:

  • Social Security Disability Insurance: This disability program is one you may have heard of a few times. But just in case you haven't, it's a federal payroll-funded disability plan run by the USA . Sounds important, doesn't it?
  • State disability programs: There are only five US states that offer disability state programs: California, Hawaii, New Jersey, New York, and Rhode Island. If you live in one of these states, check with your local independent insurance agent for more details on your disability income insurance.
disability income

Save on Disability Income Insurance

Our independent agents shop around to find you the best coverage.

Difference between Group Disability Insurance and Individual Disability Insurance Plans

Now that you know what they are, it’s good for you to know how they're different. Individual short-term and individual long-term disability insurance is offered to the individual and is a single policy. The individual is rated for health risk factors and age and then offered a plan to suit their needs. 

Both group short-term and group long-term disability insurance plans are offered through your employer. They're offered to the entire group of eligible employees. And individual health risk factors are not taken into account because the rate is based on the group. 

These are also known as employer-sponsored disability insurance plans because your employer is sponsoring them. Usually all or part of the premiums are paid for, depending on how generous your company is.

Independent Insurance Agent

What's So Great about Independent Insurance Agents?

An independent insurance agent can be very helpful in deciphering the land of disability insurance. In fact, they can be your knight in shining armor when it comes to insurance. 

These agents know where to find the insurance goods with some of the best carriers at their fingertips, ready to go.

Knowing which carrier accepts what risk factors and what coverage they provide is their job, and they love it. Ready to take on anything that gets thrown at them, they are the perfect person to have on your insurance speed dial. 

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