There are many advantages and disadvantages to a group disability insurance policy. It is important to know their differences, before making a final decision.
Advantages of each
The biggest advantage with a group policy is the price. Since they are group plans and are lumped together, the premiums are usually lower. Employers usually pay a portion of the premium. The portion you pay is taken from your paycheck and taken out of your before taxes. There are usually no physical examinations required for a group policy. Everyone who opts in will get coverage.
The premiums for an individual policy are also not subject to taxes. Other individual policy benefits are that they offer great flexibility and features such as; lifetime benefits, cost-of-living increases, partial benefits, etc. An individual policy also provides the most comprehensive coverage. Your premiums generally can not be increased and you can not lose coverage, as long as the premiums are current.
Disadvantages of each
Group disability policies are less flexible in benefit design than individual disability policies. An employer group policy is not portable. You cannot continue the group-plan if you discontinue your employment. Additionally, the premium will increase as you get older. The definition of disability may be less liberal than with individual coverage. Group plan benefits will be offset by Social Security, worker’s compensation, and some other types of disability insurance.
Individual disability plans are more expensive. Purchasing an individual will cost more and you will have to pass a physical. If you have an existing condition, or other health issues you may not qualify for some individual policies, or you will pay a higher premium. You have to make sure your premium every month.
The choice is yours
Weather you choose a group plan through your employer, or purchase a plan on your own, and make sure the policy covers what you need. Some group disability insurance will not meet your needs if you should become disabled. Chances are, you can find an individual disability policy that will fit your needs and budget.
If you choose the convenience of a group disability insurance policy, your payment will be made for you every month, on time without worry. As long as you are working with the same employer, your benefit will always be there, unless the employer changes the policy. There is also the possibility that your employer will choose not to continue a group disability policy.
An individual disability insurance policy will be portable and as long as you keep up with your premium, you will have it when you need it. You can add or subtract features so that you have the right policy to cover you should you become disabled. The important thing is to get the disability policy that will fit your needs and budget. Don’t be intimidated, do some research and find the best solution for you