Disability Income Insurance, an Often Overlooked Employee Benefit

As an employer you provide a range of benefits for your employees—but an often overlooked employee benefit is disability insurance.  This benefit can further deepen your employee’s allegiance to your organization and help differentiate your company among prospective employees.  Unfortunately, the statistics show that employees have a three in 10 chance of suffering a disabling illness or injury during their career that would keep them out of work for three months or more.

For most employees their greatest asset is their ability to earn income throughout their career.  However if due to illness or accident an employee is unable to continue working, the result could be devastating.  Most people aren’t aware that 90% of disability claims are from people who are unable to work due to illness.  This could include cognitive impairment or other illnesses.  

By purchasing disability insurance through their employer, an employee has access to more affordable disability plans, and it’s easier for them to get the coverage they need especially if there are pre-existing conditions.  Employers can offer this as a core benefit, or as a supplemental or voluntary plan.  If supplemental or voluntary, employees can take advantage of payroll deduction which simplifies the payment and administrative process for the employee, and helps them maintain coverage.

The management team should also consider Key Person disability insurance.  This provides benefits to the company if a key person becomes disabled and is unable to work.  The company can use the benefits to hire a temporary employee if the key person is out on short-term disability.  If the employee is out of work permanently, benefits can help defray costs such as hiring a replacement, training, loss in revenue and unfunded salary continuation costs.

In addition to Key Person insurance, Business overhead expense disability insurance (BOE) should also be considered.  This protects the company in case the owner becomes disabled.  Benefits include:  rent or mortgage payments, leasing costs, utilities, accounting/billing and collection service fees, employee salaries, employee benefits and other regular monthly expenses.

We protect our tangible property i.e. homes, automobiles, jewelry without thinking twice, but don’t neglect your employees!  Offering disability insurance will go a long way in terms of how your employees view you and the company.    Educating your employees and providing for them is important—but don’t forget about your company leaders either!

If you would like to discuss the range of disability insurance options and creative plans tailored to your needs, please contact Andy Bonee, Sr. Vice President at Provider Group.  Andy can be reached at
781-726-7115 or [email protected].