As the name implies, a "group" disability insurance policy covers a number of people who are linked in some way, such as through an employer, a trade association, or a school. Benefits are paid to replace earning lost due to an accident or sickness. Premiums may be paid for by the individual, the organization, or both.
Generally, the cost of group coverage is less expensive than the cost of individual coverage. Group policy benefits typically are paid for a limited period of time, 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 injuries, while others do not. A policy may cover short-term disabilities, long-term disabilities, or both. Additional factors to keep in mind are: eligibility, how long you have to wait before benefits begin (the "elimination" period); the dollar amount that will be paid (benefit level); and for how long benefits will be paid (benefit period).
The Business Need for Disability Insurance
Self-motivated individuals frequently play a crucial role in the success of a business. This is particularly true of small business in which one or two talented people possess highly specialized skills or knowledge that other employees do not have. If such a "key" person were to suffer a long-term disability, not only would the individual face substantial financial risk, but the very survival of the company could be in jeopardy.
Although sole-proprietorships and partnerships are generally the most vulnerable, corporations, particularly corporations built around one or two individuals, are also at significant risk. However the business is organized, when you consider the likelihood that you or one of your key employees may become disabled, there is a clear need to protect both your personal income and the financial well-being of the company.
At Viti Financial we offer individual and group disability insurance. For more information, please contact one of our knowledgeable insurance representatives.