“Group” disability insurance covers a number of people who are linked in some way, such as through an employer, a trade association, or a school. The policy pays benefits to replace earnings lost due to an accident or sickness. Premiums may be paid by the individual, the organization, or both.
Generally, the cost of group disability coverage is less expensive than the cost of individual coverage. Group policies typically pay for a limited period of time, and with the maximum income benefit rarely greater than 50 or 60 percent of earnings.
Group policies can vary widely. For example, some policies cover both non-occupational and occupational illness and injury, while others do not. A policy may cover short-term disabilities, long-term disabilities, or both. Additional factors to keep in mind are:
- eligibility requirements
- how long the wait is before benefits begin (“elimination” period)
- the dollar amount that will be paid (benefit level)
- for how long benefits will be paid (benefit period)