What’s the Difference Between Individual and Group Disability Insurance?
For most people, a good deal of thought goes into decisions regarding things like vehicle insurance. It is common to weight the basic coverage available from ICBC with other coverage offered by private insurers.
Oddly, many do not put the same careful consideration into long term disability insurance. Some private employers provide group disability insurance, while others do not. Many people change jobs without considering that they are giving up a strong long term disability policy in favor of limited or no coverage at all. The good news is that individual disability coverage is available independent of your employer. That said, there are important differences between these two options. We discuss both below.
Understanding long term disability insurance
Long term disability policies provide you with a portion of your salary if you are too hurt to work. These insurance policies can help you make ends meet as you recover from a serious, unexpected injury. Each policy differs, but it is common to recover benefits worth 60 to 85 percent of your salary. There are usually hard caps on monthly benefits as well, so someone making a very high salary could recover a much smaller benefit each month. These come in short- and long-term coverage.
Short-term disability coverage is available immediately after you run out of sick leave through your employer. The lengths of these policies can vary, with some offering coverage for a little as six months after the claim is filed. Some policies will cover up to one year.
Long-term disability coverage provides benefits for serious, debilitating injuries that prevent you from working after your short-term coverage expires. These policies could cover your income for up to two years if you are able to return to work for a lower-paying job than you held previously. If you are unable to work in any capacity, these policies could pay out for years. In some cases, you could be eligible for benefits until you turn 65. A personal injury law firm could assist you with filing these claims.
Group disability insurance
Your access to group long term disability insurance typically comes from your employer. While this type of coverage is not mandatory, many employers throughout British Columbia offer it as part of their compensation package.
The distinguishing factor that sets group policies apart is their structure. Employees across the company (or “group”) each pay premiums into the policy. These premiums go towards covering any claims that are filed. This allows the employees of the company to spread the risk across a wide range of people. Because of the strong base of healthy workers paying premiums each month, the cost of these plans is typically less than individual disability insurance.
Individual disability insurance
Individual disability policies are unrelated to your employer. In fact, they will follow you from one job to another for as long as you pay your premiums. If you change jobs often, this type of coverage could be best. However, you will be responsible for paying the cost of this coverage entirely. These policies are commonly used by the self-employed, or by those working for a company that does not offer disability insurance coverage. However, some workers choose to purchase their own supplemental coverage if their policy at work is insufficient. While individual long term disability policies are often more expensive, they also usually offer additional options not available to group policies.
Get help with your disability claim
Regardless of whether you have a group or individual policy, filing a disability claim can be complex. In many cases, the insurance company will drag their feet or look for excuses to pay out on a disability claim. If your claim for disability benefits has been denied, you might benefit from the guidance of a long term disability law firm.
At Preszler Injury Lawyers, we have experience appealing denied claims under both individual or group policies. We understand the stress that can come with a serious injury, and we look forward to helping you relieve that stress through a successful disability claim. To discuss your legal rights, schedule a free consultation with Preszler Injury Lawyers as soon as possible.