What is Group Disability Insurance? By Disability Insurance Advisor


Group Disability Insurance is a must-have occupational coverage policy for most of the blue-collar professions, and a few white-collar jobs. As per the United States Social Security Administration, every one of four adults in 20s suffers from some kind of disability. The group disability and individual disability insurances are somewhat different, both have their own perks and disadvantages. The coverage period starts from 0 days, 3 months or 6 months to 65 years. Group disability insurance is paid by the employer for all or some of their full-time employees.

Group Disability Insurance: Definition

Group disability insurance is a group insurance plan for the companies/firms which covers the expenses for the employees in case of any disability, whether it is mental or physical incapacity that hinders the job of an employee. Under this type of insurance, the employer take care of all the processing matters with the Insurance brokers and companies. If voluntary where the employee pays the insurance, the employees just have to show interest in the insurance, and they can opt-in at open enrollment time. If involuntary, then all the employees must be covered by the employer.

For example, you are an employee of ABC & Co. You were on the way to work, and someone hit you on the pedestrian. As a result, you have a severe back problem and unable to continue work for 8 months. Then. The Group Disability Insurance will pay usually 60% of your base salary because the disability stops you from doing your work. They will be paying you until you are come to your routine life. There are types of Group Disability Insurance:

1. Short-term Group Disability insurance

Short-term Group Disability is an employer-provided group insurance that covers weekly incomes of an employee, commonly 60% of the salary after tax deductions and expenses. The coverage is determined by the employer, it lasts for a short duration, the lost salary is included in the insurance policy, the time period is from Immediate to 7 days to 13 or 26 weeks.

2. Long-term Group Disability Insurance

Long-Term Group Disability is made effective after the disability period of at least 90 days, the benefits are long-term with possible premium deductions and non-flexible policies for employees. The insurance coverage period starts from 90 days or 180 days to the age of 65 or retirement. The recoverable salary range is $ 5,000, 6,000 and rarely $10,000 per month of base salary for long-term group disability insurances. It will end if an employee loses or changes job, the employee cannot transfer an already running coverage to another employer. It helps the employers to retain quality employees to the same organization throughout their careers.

Group Disability Insurance VS Individual Disability Insurance

Individual group disability insurance plans are more beneficial in case of a sudden accident; they are portable i.e. not dependent on the individual company or employer. If you lose or change jobs, it doesn’t affect the Individual Disability plan. Most employees apply for both insurances simultaneously as a cover to each. Individual insurance is a supplemental insurance if a worker fails to retain the job, he/she will still benefit from individual disability insurance in case of an accident. Although it takes time for approval of a group disability insurance, the Individual Disability Insurance will cover your expenses in the gap. The received amount under group disability insurance is tax-deducted, which means the benefits are reduced for employees. Most commonly, employees opt for individual disability plans alongside group insurances to cover the expenses.


There are some great benefits of a group disability insurance policy:

  • Group disability insurance covers usually up to 60% of base salary of a disabled employee.
  • Between Short term and long-term plans coverage may starts from Immediately or 90 days to age 65 or social security retirement age coverage. The elimination time period is 90 days; the period for individual policies is longer than the group insurances.
  • It also offers around 60% of the base salary up to $10,000 per month. The additional policy coverage extends up to 70% coverage of the base salary after disability.

If you are looking for a Group Disability Insurance for your organization. Give us a call today at +1 (800) 788-8921 or send us an email here. Disability Insurance Advisor is ready to help. We are in the disability insurance field for the last 20 years. We can help you understand the coverage and limitations of your current insurance policies held such as Medicare, Medigap Insurance (also known as Medicare Supplemental Insurance), Medicaid, or other similar policies for living assistance help.


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