Group Disability Insurance (Short & Long Term Group/Individual)-(core/buy-up):

Insurance plans that provide income for an individual who has become disabled and is no longer able to work. The compensation provided is either a flat amount or based on a percentage of the regular income. Disability benefits are periodic payments to an insured who can no longer work due to illness, disease, or a non-work-related accident. There are three types of disability: paid sick leave, short-term disability, and long-term disability. Other programs, such as worker's compensation and state-run temporary-disability programs, also cover disability. Social Security provides a degree of benefits as well.

Long and Short-term-disability plans provide income for an individual who is no longer able to work due to an illness, disease, or non-occupational injury. Compensation is either a flat amount or one based on a percentage of regular income (often 50 percent to 60 percent). To qualify, most plans require that the individual be a full-time employee for at least one year before the disability and be under the age of 65. Short-term disabilities are generally covered by other health plans. To the surprise of many organizations, the combined cost of sick pay and disability benefit programs often exceeds that of medical benefit programs.

Short-term and long-term disability benefits typically range from four to six percent of payroll. When workers compensation costs are included, total direct costs can reach six to nine percent of payroll. "Indirect costs," such as lost productivity, recruitment, overtime, retraining and administration are also very substantial and can run as high as 4 to 6 percent. The total cost of disability can be as high as 10 to 15 percent of payroll in some organizations.