What is wage loss insurance?

A wage-loss replacement plan (WLRP) is an agreement between a company and its workers or between an employer and a group or organization to compensate employees for lost wages. Benefits may be paid by the employer, an insurance company, a trustee, a board of trustees, or another independent entity. When all of the following requirements are satisfied, a plan is classified as a wage-loss replacement plan:
The plan is considered a group plan since it covers more than one employee.
The plan is supported entirely or in part by the employer, depending on the situation.
Indemnification of workers against loss of employment income due to illness, accident, or maternity leave is the plan’s goal.
Benefits are paid every month rather than in one single payment.
Insurance principles dictate that money be amassed, generally in the hands of a trustee or an account designated as a trust. Then, the amounts are determined to be adequate to cover projected claims.