What Is Single Disability Insurance?
Two types of disability insurance policies exist -- group and individual. While both provide similar benefits and have the same intentions, the means of obtaining coverage under each type differs greatly. In some respects, group policies have advantages over individual policies. However, individual products do not typically have the same limitations as group contracts.
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Group Disability Insurance
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Group disability insurance products are offered as employee benefits to workers. These products typically have limited, or no, underwriting and are easy to obtain. In large groups, simply being an employee qualifies you for coverage. In small groups, minimal underwriting, consisting mainly of simple medically based questions, is required to determine eligibility. Additionally, group policies often contain maximum benefit amounts and standardized elimination periods and benefit periods that apply to every covered employee.
Individual Disability Insurance
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Single, or individual, disability insurance policies are sold by insurance agents and brokers to consumers outside the workplace. These policies contain the same benefit provisions and protect against the same liabilities as group products, but obtaining this coverage requires more effort and involvement from the applicant. Single policies are customized to meet the specific needs of the individual, and they have no maximum benefit amount beyond limitations set by state regulations. Unlike most group policies, single disability insurance policies can be kept regardless of where you work or how many times you change jobs, because the coverage is connected to you as an individual and not to your place of employment.
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Underwriting
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Most individual contracts require the applicant to submit to a paramedical examination, during which physical measurements and data are collected, along with blood and urine samples. Information gathered from the exam, and results of lab tests performed on your fluids, help insurance carriers create a customized risk profile used to determine your eligibility for coverage as well as your premium. Group policies, on the other hand, can pool your risk across multiple people, resulting in easier underwriting requirements and less stringent eligibility criteria.
Premium Payments
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Single disability insurance premiums are based entirely on your own risk profile and the provisions of the plan you purchase. The bill for your coverage arrives at your residence and must be paid via check, credit card or other means available from the carrier. If you fail to make a premium payment within the time allotted, coverage is cancelled and you will be without insurance. Group premiums, on the other hand, are deducted from your payroll check and held by your employer until the monthly bill arrives from the insurance company. That bill requires payment for every employee covered under the group disability insurance program.
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