Group Disability Income Plans

Question 1

How is payment determined?

Answer 1

Specified as a percentage of the individual’s earnings.

Question 2

Group Short-term

Answer 2

• Characterized by maximum benefit periods of rather short duration, such as 13-26 weeks
• Benefits are typically paid weekly, 50-100% of the individual’s income

Question 3

Group Long-term

Answer 3

• Provides maximum benefit periods > 2 years, occasionally extending to the insured’s retirement age.
• Benefit amounts are usually limited to about 60% of the participant’s income
• If an employer provides both a short-term & long-term plan, the long-term plan typically begins paying benefits only after the short-term benefits cease.

Question 4

Definition of Total Disability for Long-term Plans

Answer 4

• “Own occupation” definition of total disability is used for the first or two years of disability,
• Then switch to an “any occupation” definition.

Question 5

Minimum Service Requirements

Answer 5

Most group disability plans require the employee to have a minimum period of service, such as 30-90 days before he is eligible for coverage.

Question 6

Group Disability Income and Workers’ Comp.

Answer 6

• Most group plans include provisions making their benefits supplemental to workers’ compensation, so that total benefits received do not exceed a specified % of regular earnings
• Workers’ comp – occupational disabilities, so group disability income sometimes limit coverage to non-occupational disabilities