Group Disability Insurance
What Does Group Disability Insurance Mean?
Group disability insurance is a policy designed for a company, group, or organization to provide compensation to its members if they are unable to work and earn an income due to a disability.
Insuranceopedia Explains Group Disability Insurance
A group disability policy can be either contributory or noncontributory.
It is considered contributory when the members of the policy contribute to the premium payments. In contrast, it is noncontributory when the company or organization itself covers the cost of the policy, with no contribution from the members.
Not all members of a group are automatically eligible. A member may be excluded if they have not met the required length of employment for inclusion in the policy.
The insurer may also require a minimum number of people for the policy to be issued. Therefore, if a member leaves the policy, the group must find a replacement to maintain the required number of participants.
If a member leaves the group, they are no longer entitled to any coverage.
