Disability Insurance Archives - Harbor America

LumberYard KeyPersonFAQs

Key Person Disability Insurance FAQs

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Each company, regardless of size, employs persons who are essential to the continued success of the business. Key person disability insurance was created to protect the business in the event one of their key members suffers an illness, injury, or accident resulting in a disability. Investors, stakeholders, and business owners are able to continue operations and manage finances without major disruption.


How are Key Persons defined?

A key-person or employee is defined as someone who may hold either the most important relationships, accounts, or sensitive information, knowledge, or skills vital to the continued success of the business.

To whom is the payment dispersed?

If needed, coverage is paid to the employer or business.

How are these claim premiums taxed?

Generally, in the US the premiums are not tax-deductible.

Aside from finances, what is the benefit of Key Person Disability Insurance?

Planning for any unforeseen events allows the business to have a contingency plan in place for recruiting, hiring, and replacing the key person.

What types of companies should consider adding Key Person Disability Insurance?

Any business that employs someone whose contributions cannot easily be replaced should consider Key Person Disability Insurance.

Clients have come to rely on the Harbor America team for expert advice pertaining to the continued success of their businesses and protecting the future of their employees. Contact Harbor America to learn more.

Short-Term Disability (STD) Basics

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Front-loaded with a short waiting period, short-term disability plans are in place to assist employees in replacing all or part of their income due to temporary inability to work.

What You Need to Know:

  • Trigger events are any illness or injury that prevents you from working will initiate Short-Term Disability.
  • Depending on your policy, coverage will start anywhere from one to 15 days after the employee suffers a condition leaving them unable to work.
  • It is not uncommon for employers to require employees to use sick days and/or provide medical documentation prior to starting short-term disability as part of the terms.

Many states have varying rules about coverage. Contact Harbor America to understand your state’s mandatory coverage guidelines.



Long-Term Disability (LTD) Basics

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Employer management of disability benefits is an important aspect of the organization’s benefits package. This short video explains the primary elements of LTD coverage. In most cases, LTD works in tandem with the offered short-term disability (STD) coverage. Reach out to your HR Team to understand more about your organization’s LTD benefits and coverage.

What You Need to Know

  • Regardless of whether the injury was sustained at or away from work, covered conditions may include: stroke, pneumonia, and pregnancy complications.
  • LTD begins after a short-term disability policy runs out, typically between 90 -180 days after the initial event.
  • The length of coverage and rate schedule depends on the policy and the duration of benefits selected by the employer.

Certain industries or occupations can dictate certain coverage specifics. Contact Harbor America to learn more.