Group Disability Insurance
What types of disability insurance are available?
Disability insurance generally falls into two categories:
- Short-Term Disability (STD): Policies typically have a waiting period of 0 to 14 days and provide benefits for no longer than two years.
- Long-Term Disability (LTD): Policies typically have a waiting period of several weeks to several months. Benefits may continue for several years or for the remainder of your life.
Important policy protection features
Disability policies may include the following renewal and cancellation protections:
- Non-cancelable: The insurance company cannot cancel the policy except for nonpayment of premiums. You can renew the policy each year without an increase in premiums or a reduction in benefits.
- Guaranteed renewable: You can renew the policy with the same benefits, and the insurer cannot cancel it. However, the insurer may increase premiums for everyone in the same rating class.
Additional disability coverage options
In addition to traditional disability policies, there are several additional coverage options to consider when purchasing a policy:
- Additional purchase options
Your insurance company gives you the right to buy additional insurance at a later time for an additional cost. - Coordination of benefits
The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies. - Cost of living adjustment (COLA)
The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA. - Residual or partial disability rider
This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled. - Return of premium
This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy. - Waiver of premium provision
This clause means that you do not have to pay premiums on the policy after you’re disabled for 90 days.