What Is Group Disability Insurance? 4 Best Guides For You!

Are you an employee who cannot go to work because of certain circumstances that happened and wanted to know what is group disability insurance? In simple terms, group disability insurance is a type of coverage that provides partial payment for the income of employees who suffered from an illness, accident, or sickness.

It is offered to them when they suffer from particular circumstances because of the inability to work that may affect their income, leading to more problems for them and their family.

The group disability insurance provides benefits for the employees to maintain their financial status while not working until they return to their job. Sometimes, we encounter unexpected mishaps while we try to provide for the needs of our family.

For the employer, it is best to consider the current status of your disabled employees to provide them financial benefits giving the employee and their families peace of mind. With that, read on as we discuss the best guides for you!


Guides About Group Disability Insurance

When you are an employer, offering a full range of income replacement benefits for employees who cannot work because of such circumstances will result in more productivity from the employees once they are back. Since this is a group disability insurance, all members of the organization can receive their disability insurance in case something happens.

To learn more, here are the four best guides on what is group disability insurance!


Guide #1. Group plan of disability insurance

An employer of a company commonly provides group disability insurance. The period of the insurance provided may differ, which may be in long-term plans or short-term. Once you avail of the disability insurance, the employers usually pay the total cost of the insurance.

On the other hand, if the company you work for does not provide any group disability insurance plans, some membership and professional organizations offer these. Even if other organizations offer them, the policies are still similar to those provided by the employers. The advantage of these membership group plans is that you are still covered by the insurance even if you transferred into another company, as long as you maintain your membership.


Guide #2. Benefits

The benefits of your group disability insurance plan are given for a particular period, depending on the term of the group plan provided to you by your employer. When you are in a long-term group plan, the benefits given to you range from a minimum of five years up to ten years. Meanwhile, for the short-term group plans, the benefits are provided for three months until six months, or in some cases, a year. But, no matter how long the period of your benefits is, it is valid until you can go back to work.

Additionally, if the policyholder of the insurance paid the total cost for the group plan, the benefits you will receive would be considered a taxable income. However, if you spent a portion of the group insurance policy, the tax will be the same percentage of the benefits you receive. Lastly, when you paid the total premium for the group disability insurance, the benefits you will receive will not be taxable, considering that you paid the premium on an after-tax.


Guide #3. Coverage

The coverage of the group disability plan may usually range from 50 to 60 percent of your income, depending on the insurance policy purchased by your employer.

It is important to note that the group disability plan does not cover your entire payment for the period you cannot work. The insurance policy also ensures that the employee will receive their compensation not more than their income during their job. Frequently, the group plan may consider disability benefits from another party, such as the Social Security Disability Insurance or workers’ compensation.


Guide #4. Types of group disability insurance

Your employer may provide you with two types of group disability insurance plans, specifically long-term disability insurance and short-term disability insurance. For the long-term, it provides income protection insurance to the employee until they can go back to work or when they are not disabled anymore.

There are also some cases where it is provided to the employee until they reach their retirement. Disabilities covered by the long-term insurance plan are usually medical conditions, such as cancer, chronic illness, circulatory diseases, and heart attack.

On the other hand, short-term disability insurance covers a portion of the employee’s regular income, ranging from 50 to 60 percent. The short-term insurance plan typically lasts for three to six months and is given right after the disability occurs. Such circumstances covered by short-term disability insurance are pregnancy, prolonged sickness, or recovery period after surgery.



And those are the four guides on what is group disability insurance. As an employer, it is essential if you provide help when your employee has a disability. Financially helping them will benefit both them and you in the long run as they may become more productive in their work. Lastly, for the employees, when you suffer from any circumstances that may cause inability for you to work, do not hesitate to seek out your employers regarding the group disability insurance to provide financial help to you even if you are not at work.

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