How to Choose Short Term Disability Insurance for a Small Business
When government plans aren't enough to cover your lost income, you would be wise to buy short term disability insurance for your business. No one envisions losing income or having a severe disability but it does happen. Choose short term disability insurance for a small business and make sure you and your employees are protected in the future.
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Instructions
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Decide what kind if insurance you need. There are different plans that cover different work situations, ages and incomes. Older employees may cost more but younger ones may need maternity leave.
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Be realistic about what your company can afford to pay in premiums. Take into account a cost of living adjustment so that your plan will cover what is needed down the road. Determine how much an employee would need to pay for normal living expenses like rent and food.
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Ask employees to pay toward the short term disability insurance policy each week in the form of paycheck deductions so your company costs will be lower.
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Understand that short term disability insurance has a time period attached to it which distinguishes it from long term disability. Decide if you want one, two or three year benefits for your workers, because the duration affects the cost.
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Be careful when you choose the waiting period date. The longer the waiting period between the injury and the claim, the cheaper the policy. Also check if your short term policy will be in place until the long term disability insurance comes through.
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Have the insurance agent define disability so that you know exactly what it covers. It could mean the worker can't do their own job or it could mean the worker can't perform any job at all.
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Understand how the pay out works with your specific policy. Know if you are paying out 50 percent of wages or 70 percent of wages. Set a maximum payout per week.
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Review each part of the policy with your agent and compare it to other policies. Understand if the insurance can be renewed, if it covers workers with previous disabilities, how much your deductible is and if any special conditions exist.
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Tips & Warnings
Know your state or country requirements. You don't want a lawsuit on your hands.
Compare policies from different companies. Get a quote and shop around.
