I just did a review of all of our benefits programs. Like other startups, 42Floors offers a great health, vision and dental package and life insurance coverage. We pay 100% for both employees and dependents. It’s expensive, but it’s worth it.
Having recently gotten married, I’ve been spending a bunch of time thinking about these sorts of things in my personal life as well. And one of the things my dad brought up with me is just how important it is to have a good long term disability insurance plan in place. I had never actually heard about it. Long term disability is a policy that can pay out 60% of your salary for the rest of your life if you have an occupation-ending injury.
If something should happen to me and I can no longer do my job, a long term disability program could fundamentally preserve the standard of living in my family. But they’re not cheap. The premiums I was looking at for a middle of the road plan were around $2,500-$3,000 a year. That’s a lot of cash to pay year after year.
Back to startups.
Our company benefits provider explained that individual long term disability insurance is much more expensive than a group policy. To get all of 42Floors covered on a long term disability policy from a reputable firm will cost about $2,500 a year. That’s incredible. It’s almost identical to buy a group policy that covers everyone as it is to buy an individual policy that would only cover just me.
But there is so much more than just cost savings. I asked everyone in our company if they had long term disability policies in place. Big surprise—no one did. It’s just not something most of us think about.
I’m sitting here envisioning in my head what I would do if one of our employees was no longer able to do their job – what a horrible ethical position to be in.
For a fairly nominal sum, you could cover them with a policy that could make an enormous difference in their entire life. And if at that horrible moment when you’re hearing the devastating news that one of your employees has been severely injured, you’ll at least know that because you took the time to set up this policy, they are going to receive a majority of their current paycheck for (nearly) the rest of their life.
Sometimes we get caught up with thinking of our various compensation packages and benefits as recruiting tools. This one won’t really register as a recruiting tool. But, as the founder of a startup you should take the well-being of your employees as your single most important responsibility. Spend five minutes today. Do it right now. Call your broker and get a good long term disability insurance policy in place. And hope you never have to use it.