Group Disability Insurance

Group disability insurance can be a great ancillary option to provide your employees, especially if the work your business conducts is more physically demanding in nature. Group disability insurance plans usually cover disabled employees with up to 60% of their pre-disability income, allowing them to rest more easily during a difficult time. Additionally, these plans work to provide overhead protection for the business. Contact Beckham Insurance Group today to request a quote.

Advantages of Group Disability Insurance

There are many benefits to purchasing group disability insurance. Here are a few highlights for you to consider:

Group disability plans, unlike private insurance plans, are relatively easy to apply for. This is largely because you neither have to prove your income status or health condition to qualify. Group disability plans are often guaranteed-issue, meaning that no matter an individual’s level of health, they’ll receive the same coverage as a colleague who is healthier than they are.

Group disability plans often allow insurance coverage for pre-existing conditions once the policy has been in effect for twelve months or more. This can be an advantage over private policies that do not offer coverage for pre-existing conditions.

Types of Disability Insurance

There are two specific types of disability insurance that you can choose between based on the needs of your company and employees:

With group short-term disability insurance (GSTD), individuals looking to receive benefits for their disability have a shorter elimination period than those on long-term plans. This means that individuals will be able to receive payouts for their disability much sooner—over the course of 7 to 14 days instead of the long-term plan’s 90-day wait period. These plans also may pay up to 100% of an employee’s base salary in benefits, but they only cover an individual for 3-6 months.

Unlike short-term disability insurance, group long-term disability insurance (GLTD) will pay benefits to disabled employees until either the employee recovers, passes away, or the benefit period ends. Generally, these policies can last until the individual turns 65—or in some cases, 67 years old. GLTD normally has a 90-day elimination period for coverage, though these can be extended, depending on the insurer. GLTD is also limited to 50-60% of an employee’s base salary with an option for employers to increase coverage to 70%, often with monthly benefit maximums.

Important Considerations

Among all the benefits of group disability insurance plans, there are a few key factors that should be considered before you choose a plan.

Unfortunately, many group disability insurance policies require an individual receiving coverage to be totally disabled before they can qualify for benefits. This can leave employees under coverage with hefty financial burdens if they incur an injury that only partially disables them. Be aware of the exact coverage offered before signing up for a group disability policy. Ensure you understand what constitutes “disability” by individual carriers as it will differ from company to company.

If an employee receives any workers’ compensation relief money as a result of becoming disabled on the job, disability insurance benefits will be reduced by however much money the individual receives from workers’ compensation.