What Are Transition Benefits?
Transition benefits is a term often used in conjunction with long-term disability coverage to provide additional compensation while reestablishing a business or practice. Transition benefits offset wages lost which may not be fully covered by workers' compensation laws in your state.
Long-term disability policies often have a transition benefit rider option which is important for professionals such as doctors, lawyers, architects or any other profession that relies on building up a clientele over a an extended period of time. While on long-term disability it can take significant time to rebuild a professional practice and increase sales as a result of an illness or injury. During that time the loss of income can be significant which is where transition benefits can help offset decreased revenue while rebuilding the business.
Sole proprietors and other licensed professionals often have decreased income from coming off of a disability and during that transition time this type of benefit can provide additional financial security while rebuilding your revenue stream. As with any insurance coverage it is important to pay careful attention to the terms and conditions outlined in the policy and to fully understand the benefits provided to ensure proper protection.
Transition benefits is meant to describe residual or partial disability payments that are provided for a period of time where wages may be decreased by taking part-time employment or receiving a salary less than what wouldn't normally been received while conducting normal business. Individuals in the medical and legal industry may have a need to have a transition benefit rider on their standard long-term disability policy that pays benefits for the time required for recovery and to return to optimal revenue levels.
Licensed professionals such as lawyers and doctors need to determine from whom they are purchasing the transition benefit coverage for their insurance policy. Some individual insurance agents will offer transition benefits as an optional coverage but just as likely transition benefits will be mass marketed targeting specific professions and not necessarily backed by an insurance company or other organization with the stability to guarantee proper payment.
Members of professional associations may be able to purchase long-term disability insurance with transition benefits from a reputable insurance company licensed to do business in your state and still receive the premium savings benefits group plans offer for its members. As always do your research and read the fine print to ensure the purchase of quality transition benefit coverage for your business and ensure peace of mind.
