Last updated: November 24th, 2022
Reviewed by
Paige Geisler
Licensed Insurance Agent
Other times, a disability is permanent, and you’re never able to return to work. In either situation, disability insurance can help you financially. There are different types of disability insurance, and you may qualify for more than one type at a time. Today we’ll discuss a common type called group disability insurance. Sometimes, disabilities are temporary, and you can return to work after a few weeks, months, or years.
Table of Contents
Group disability insurance is employer-sponsored coverage typically offered for little or no cost to you. It provides benefit payments to replace some of your income if you’re out of work due to an injury or illness that’s left you temporarily or permanently disabled.
If your employer offers group disability insurance, you must sign up for it. You may be able to do this during your employee onboarding or the annual benefits enrollment period. Certain qualifying events (like getting married or having a child) also allow you to sign up or change your policy
You’ll have to meet specific qualification criteria if you need to receive disability payments through your insurance policy. In addition, payment eligibility varies from one company or policy to another, so you should read your policy in detail to understand your actual coverage. In some instances, you may not be eligible for benefits even though you cannot complete your current job. For example, most group disability policies won’t cover work-related disabilities. These types of injuries are covered by workers’ compensation insurance that your employer is required to have under state law. The insurer also may not pay if you can perform another job, even if that one pays significantly less than your current job.
A few common reasons people use their group disability insurance coverage include:
You might qualify for more than one type of disability income assistance. For example, you may have an individual disability policy or receive workers’ compensation. If you receive any other form of disability payments, your group policy benefits will be reduced.
If your employer offers free or low-cost group disability insurance, you should sign up for it. As long as the policy is affordable, there’s no downside to signing up, and it could help significantly if an accident, injury, or illness occurs in the future.
There are several differences between group and individual disability insurance. The most significant ones include:
Generally, a company must have at least 10 employees to qualify for a group disability insurance policy. However, employee maximums vary by insurance provider and policy specifications.
For the employee, group disability insurance is often free or costs next to nothing. The costs for employers can vary significantly based on numerous factors. Factors that can alter prices include the number of employees, type of group disability policy, business sector, location, and provider. Companies looking for group disability insurance are encouraged to shop around before making purchases.
Employees can qualify through group disability insurance through their employers or other groups like unions. Employers can find insurance options through several companies, including Anthem, Prudential, Principal, and MassMutual.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Paige is an assistant agent for State Farm and is licensed to sell property and casualty, health, and life insurance in Virginia. She handles all different types of insurance and financial services and is currently working on a securities and bonds license. Paige has a degree from Radford University in English and is a certified notary.
