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Common Group Disability Misconceptions

Many workplaces offer group disability coverage, but not many workers understand just what that coverage means for them.

In a nutshell, group disability insurance covers an individual for a certain percentage of regular pay if he or she can’t work due to an illness or injury. In many cases, policies cover up to 60 percent of that regular pay. The figure may vary according to the base rate of pay on the policy. Once an individual claims benefits, he or she pay taxes on them: they are regarded as income, just like a regular paycheck. However, the income is derived from an insurance company, not from your regular employer.

Every group disability insurance policy is different, but all are likely to feature “Any-Occupation” and “Own-Occupation” disability categories. The Own-Occupation category covers the insured 24/7 for 24-36 months. if the employee still can’t work after that period of time, the insurance company may dispute continued payments under the claim and insist that the person find work in another area if he or she is capable of working.

Each situation is different, and it pays to know just what your group disability insurance covers. Ask questions and find out before you find that you need to use it.