The agriculture industry is the backbone of America, feeding the country and the world. Farmers face a number of risks at work – dangerous equipment, livestock, and physically demanding work. When an employee is injured at work, it is likely that workers’ compensation insurance benefits will provide them with a portion of their regular paycheck as well as reimbursement for medical bills and rehabilitation required due to the injury. If one of your employees was injured away from work, what would they do? Would they be able to survive financially if they became disabled?
According to LifeHappens.org, 70% of working Americans couldn’t make it a month before financial difficulties would set in and 25% would have problems immediately; this is where disability insurance can help. Disability insurance offers income protection to individuals who become disabled and can no longer work. Disability insurance can ease the financial burden on a household when someone has a serious non-work-related illness or injury. The main difference between disability insurance and worker’s compensation insurance is that for disability insurance benefits to be activated the injury or illness does not need to be work related.
Disability insurance can be purchased by individuals or it can be offered as a voluntary benefit by an employer. A voluntary benefit is one that is paid by the employee, purchased through their employer’s group benefit options. When an employer offers this type of insurance, payment can be handled three ways, the employee pays the full premium, the premium can be paid by the employer, or the cost can be shared.
DFA Insurance works with employers to offer short- and long-term disability insurance as a voluntary benefit to employees. As an employer, why would you want to offer disability insurance? When your employees know they are protected it can lead to a more engaged and loyal workforce. Offering disability insurance to your employees can help give them peace of mind. An insurance specialist from DFA Insurance can help develop a plan that meets your requirements as well as the needs of your employees.
Below are some of the key points about disability insurance. This information can help explain why disability insurance is important and what it can mean to you and your employees:
There are two different types of disability insurance, short-term and long-term. Short-term disability insurance pays a portion of your employees’ income for a short period of time after they run out of sick leave. Short-term disability insurance plans typically pay for a period of nine weeks to one year. Long-term disability pays a portion of your employees’ income for a preset benefit period or the remainder of their life depending on the selected coverage options and situation. In either case, the burden of payment falls on the insurance company, not on you as the employer.
Disability insurance policies also typically include different protection options. The first of these is a noncancelable feature, this means that the policy cannot be canceled by the insurance company for any reason, except non-payment of premiums. This gives the policy holder the right to renew the policy every year without an increase in the premium or a reduction of benefits. The other protection feature is a guaranteed renewable feature. This gives the policy holder the right to renew the policy with the same benefits and not have the policy canceled by the company (except for non-pay). However, with this feature, the insurer has the right to increase premiums as long as it does so for all other policyholders in the same rating class.
There are several additional options to be considered when you purchase a policy. These include:
- Additional purchase options – The insurance company allows the policy holder to purchase additional insurance at a later time.
- Coordination of benefits – The amount of benefits received from the insurance company is dependent on other benefits received due to the disability. The policy will specify a combined target amount to be received from all policies, the disability insurance will make up the difference.
- Cost of living adjustment – The cost of living adjustment increases disability benefits over time based on the increased cost of living measured by the Consumer Price Index. A higher premium is paid if you select this option.
- Residual or partial disability rider – This provision allows an injured person to return to work part-time, collect a partial salary and receive partial disability payments if he/she is partially disabled but able to work part-time.
- Return of premium – With this provision the insurance company will refund part of the premium if no claims are made for a specific period of time declared in the policy.
- Waiver of premium provision – This clause means that the disables person does not have to pay premiums on the policy after he/she is disabled for 90 days
When considering what type of disability insurance to purchase everyone should, at a minimum, consider your necessary living expenses. When offering disability insurance to your employees, an insurance specialist from DFA Insurance can help determine how much coverage may be needed. An DFA Insurance agent can explain the cost of disability insurance and the variables like:
- The worker’s compensation (salary)
- The worker’s health
- The worker’s lifestyle behaviors, such as tobacco or alcohol use
- The amount of monthly benefits the worker intends to receive
- The disability insurance policy’s options
Disability insurance can help replace a portion of your employee’s income if an injury or illness prevents him/her from working. Determining just how much you need or which policy to choose can be difficult. The best way to ensure that your employees are properly covered for the unexpected is to discuss your options with an insurance specialist from DFA Insurance. For more information or to set up an appointment, call DFA Insurance today at 1-877-358-9523.
This article is for informational purposes only. Contact your local, independent insurance agent for coverage advice and policy service.