Group Disability Insurance

Group Disability Insurance


Group Disability Harman Stone

Group disability insurance is a group insurance policy that covers a group of employees or other eligible group.  The insured group has a common interest or association, such as employer, trade, or an affiliation with an educational institution.  All eligible individuals may be covered by the policy, and the cost of group coverage is often less expensive than the cost of individual coverage.  The plan may be contributory - where the employee enrolls for coverage and contributes some percentage of the premium - or noncontributory where the employer or other type group pay the entire cost of coverage.

When you enroll for group disability insurance, you are neither issued an individual policy nor evaluated for coverage as an individual. Rather, the policy is issued to the employer or organization that represents the group - the master policyholder.  The employees or other individuals within the group that enroll for disability insurance are issued certificates of coverage rather than individual policies.  These certificates provide proof that coverage exists, and they contain information about the coverage.


Instead of paying premiums to the disability insurance company, the employee pays them through payroll deduction.  If you pay either part or all of your premium cost, your group plan is "contributory."  If the master policyholder - the employer - pays the entire premium cost, the plan is said to be "non-contributory."  For the group disability plan to be a viable plan, most or all of the group's members must be included and have coverage.  If the plan is "non-contributory," 100% of eligible employees must be covered.  If the plan is contributory, usually 75% or more of eligible employees must be covered by the plan.  If enrollment levels drop, the employer must find new participants from the eligible pool of employees.  The employer's broker usually handles this.

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