Should Your Business Consider Group Disability Insurance?
May 5, 2015 | Business and Careers
When small business owners choose employee benefits, group disability insurance sometimes gets lost in the shuffle—a fact that Manish Shah, CASL®, a Northwestern Mutual financial advisor in Princeton, NJ, finds curious.
“There’s a much greater likelihood that you or one of your key employees will be disabled and unable to work during your lifetime than to die prematurely,” he says.
In fact, the Centers for Disease Control and Prevention says that more than 47 million Americans are currently disabled, and more than half of them are in their prime working years. Furthermore, about 25 percent of today’s 20-year-olds will become disabled before retirement age, according to the Social Security Administration.
Bear in mind that disabilities aren’t usually injuries. The CDC finds that chronic illness is the leading cause of disability in the United States. Medical developments have greatly reduced the number of deaths due to cancer, heart disease and stroke, but the number of people living with these conditions has increased.
Unique Features Protect Your Business
While group disability insurance can protect you and your employees, it can also protect the business itself. Shah has seen this benefit firsthand with one of his clients. Last year, shortly before her due date with her second child, a doctor in a large medical practice found out she had late-stage breast cancer. Three days later, she had both a C-section and mastectomy, and in the months that followed, she had courses of radiation and chemo. She is now recovering at home with a healthy baby, finishing up treatment and has a good prognosis. Because the practice had group disability insurance, she has enough income each month to maintain her lifestyle and minimize worries about not working.
Her partners also have peace of mind. If her illness were to prevent her from returning to work, the partnership is covered by disability buyout insurance. Many businesses have buyout agreements in place should one of the partners die, but no protection in the event of a long-term illness. With disability buyout insurance, her partners would be able to buy out the shares of her practice without having to fund it personally. They could continue treating their patients without interruption or financial hardship.
Another reason Shah encourages businesses to buy group disability insurance is cost. “It’s fairly reasonable from a cost point of view,” says Shah. “In fact, the cost per person in a group policy is typically a fraction of the cost of an individual policy.” In addition, a group policy makes it easier for your employees to get covered. When someone buys an individual policy, he or she typically has to go through a health screening. Group policies don’t require such a screening. If you own or manage a business, it’s worth asking about the price of group disability insurance for all of your employees. For a small additional cost, you can provide a benefit that helps you attract, retain and protect your valued staff. At the same time, you’ll be laying the groundwork for your business’s continued success and uninterrupted operation—and that’s priceless.