Group Benefits
Group Life & Disability
The quiet part of a benefits package. Nobody talks about it until someone needs it, and then it is the only thing that matters.
Group term life
Usually written as a flat amount, such as $25,000, or as a multiple of salary. When the employer pays for it and the whole eligible class is covered, carriers generally issue it without individual medical questions up to a guaranteed issue limit. Above that limit, or for voluntary amounts an employee elects, evidence of insurability may be required.
Employees can often add supplemental coverage on themselves and their family through payroll. It is worth explaining clearly what happens to the coverage when someone leaves, since group life generally ends with employment unless it is converted or ported.
Disability coverage
Short term disability replaces a percentage of income for a limited period — commonly a few months — after a short elimination period. It is the benefit most often used, frequently for maternity and recovery from surgery.
Long term disability picks up where short term ends and can continue for years, often to retirement age, depending on the contract’s definition of disability.
Two contract details deserve attention. First, how “disability” is defined — whether it means unable to perform your own occupation or any occupation. Second, how pre‑existing conditions are treated in the first months of coverage.
Who pays, and why it matters at claim time
If the employer pays disability premium and does not include it in the employee’s taxable income, benefits are generally taxable when paid. If the employee pays with after‑tax dollars, benefits are generally received tax free. It is a real difference in the check someone receives while out of work. Confirm the tax treatment with your accountant — we can lay out how each option is typically structured.
Questions we ask first
- Is there an owner or key employee whose absence would hurt the business?
- What would happen to your staff financially after six weeks off work?
- Do you have any promise about life insurance in an employment agreement?
- Is this employer paid, voluntary, or both?
Not sure what you already have?
Send us your current certificates and we will read them and tell you what they actually promise.
By calling this number, you will be connected with a licensed insurance agent who can answer questions about the plans we offer. There is no cost or obligation to talk. Or email Bill@imagineins.com.