Long Term Disability Insurance Policy

Long Term Disability Insurance

CONTENTS
QUESTION 1..................................................................................................................................1
QUESTION 2..................................................................................................................................1
Critique of Plan Design Feature..................................................................................................1
Suggestions to Improve Plan.......................................................................................................2
Discussion on Taxation of Disability..........................................................................................2
REFERENCES................................................................................................................................3
QUESTION 1
Macewan Manufacturing Ltd is developing a policy regarding long term disability for
those employees who gets disabled while working in the company. The plan is applicable in a
case when the employees is total disables after the qualifying time period of 26 weeks. Disable
person need to quality that period in order to have that pension benefit. This tenure is set so that
pension benefits are offered to employees who actually gets disabled and keeps away other
person who gets minor injury while at work.
While in this period, disable person need to join rehab center so that he/she can able to
recover himself/herself in order to get employment (Loisel & Anema, 2013). The pension plan
says that individual will get 55% of his employment salary which should not exceed $10000
every month. This is an ideal amount, this is because a family can manage its expenses as well
this is a cost to the company so they need to manage the same.
There are several conditions under the policy that is person need to be totally disable.
This states that person is not in a state to work or get employed or earn for himself or his/her
family.
Other than that person need to complete his/ her disability period for 26 weeks then only he/she
can be called as totally disabled. With that co-ordination of benefit also plays important role in
payment to disable person (Perry & Buchanan, 2019).
It is responsibility of organization to provide proper benefit to total disable person. This
state that when the person is proven disable after 26 weeks, he/she should be paid 55% of salary
within $10000. Other than that, benefit is paid to the age of 65 or till the last day when the person