Understanding Critical Illness & Long-Term Disability Insurance

When it comes to protecting employees against financial hardship due to illness or injury, Critical Illness (CI) and Long-Term Disability (LTD) insurance are often referred to as "living benefits." While both provide support during difficult times, they serve different purposes.

Critical Illness Insurance (CI): A Lump-Sum Benefit When You Need It Most

CI provides a one-time, lump-sum payout when an individual is diagnosed with a covered condition, such as a heart attack, stroke, or cancer. Coverage amounts can range from $5,000 to over $150,000, offering financial relief during a stressful time.

This benefit helps cover unexpected expenses that aren’t always accounted for, including:

✅ Travel costs for medical tests or treatments

✅ Parking fees at hospitals and clinics

✅ Childcare expenses during recovery

✅ Lost wages due to time away from work

✅ Private clinic assessments and alternative treatments

Since CI provides a fixed amount based on the chosen coverage level, employees have the flexibility to use the funds as they see fit—offering peace of mind when it’s needed most.

Long-Term Disability (LTD): Income Replacement for Extended Absences

LTD is designed to replace a portion of income if an employee is unable to work due to illness or injury. Coverage typically kicks in after a waiting period of 15 to 26 weeks, with benefits paying between 50% to 70% of income, depending on the plan.

LTD plans can provide coverage for:

🔹 A set period (e.g., 2 years) or until age 65

🔹 Monthly benefits ranging from $4,000 to $12,000, depending on the group size and policy limits

🔹 "Own occupation" protection for the first two years—meaning the employee can continue receiving benefits if they can’t perform their specific job

🔹 After two years, many policies transition to "any occupation" coverage, which may require the employee to take a different role if they are able to work

Since LTD provides ongoing income replacement, it is an essential safeguard for employees facing long-term recovery periods.

Which Coverage is Right for Your Business?

CI and LTD serve different but complementary roles in an employee benefits package. CI provides immediate cash flow, while LTD offers sustained income replacement for extended absences.

If you're unsure how these benefits might apply to your team, The Benefit Guys can help you design a program tailored to your business needs. Let’s connect and explore the best options for your company.

📩 Reach out today to learn more!