Why you should not buy Group or Association plans
When comparing group or association (G\A) disability insurance plans vs. individual disability policies there are major differences:
1: The waiting period language for (G\A) plans state you have to be totally and continuously disabled during the waiting period for benefits to start vs. individual contracts that state you have to have a 20% loss of income due to the injury or illness. When someone is injured or becomes ill, physician’s routinely write “light duty” return to work releases vs. “totally disabled and the patient must stay at home for the next 3 months” releases. This scenario would prevent you from receiving disability benefits because you are not totally and continuously disabled from the beginning.
2: Group and Association policies are not guaranteed and the insurance company can cancel your contract or change the language and premiums for the entire group at any time. Individual polices can have language that guarantees no changes or rate increases for the life of the policy.
3: With Group and Association policies your definition of disability is almost always a Not Engaged Definition #3. (see definition of disability). An Individual policy can have definition 1, 2, or 3. It’s your choice.
4: Most Group plans will have offsets against Workman’s Comp, Social Security, No Fault insurance, and some even off set for Employer based retirement plan distributions. Individual Contracts have no offsets against anything.
5: With Group and Association plans you can have integration features with two group plans where they both offset each other
The other thing you don’t have to worry about on Individual plans is the integration features of having two group plans and what they both off set for…in some circumstances you can be offsetting on both policies but only have payment coming in essentially causing a dollar coming in and having 2 dollars being reduced
6: With Group and Association plans your premiums are not guaranteed and increase every age bracket under their rate structure. Typical rate increases are between 30% and 55% from ages 39 to 40, 44 to 45, 49 to 50, 54 to 55, 59 to 60, and 64 to 65.