Most employees covered by group benefit plans rely totally on their group LTD coverage to meet their disability insurance needs. But what happens in the event of job termination?
Group LTD coverage usually ends when employment terminates (some employers may extend for a few weeks or months).
Now both the employer and the employee are at risk:
- The employee needs to protect against the potential financial consequences of a long term disability.
- The employer needs to protect against the financial exposure of a legal action brought by a terminated employee who becomes disabled during the severance period (for an example, please see one of our recent blog posts here).
Unfortunately, purchasing an individual disability policy is not an option, as one of the conditions is that the individual is employed.
Now, there is a product that is designed to provide temporary income replacement coverage to terminated employees during their transition period.
Some of the product features include:
- Coverage for a period of between 6 months and 2 years (usually equal to severance period).
- Monthly benefits up to $10,000.
- Benefit formula to match group LTD coverage.
- Available benefit periods – to age 60 or age 65.
- Issue ages up to 60.
In order to qualify for LTD coverage, you must:
- Be age 60 or less.
- Have worked full time at full pay for at least the last 12 months.
- Apply for this coverage within 90 days of your last day of work.
If you become re-employed, and become covered under a new LTD plan, you may cancel your policy and receive a partial refund.
If you are interested in a no obligation quote, please either contact us at 416-754-3910/1-800-773-8638 or email Chris Gory.