Group Disability Insurance

Definition - What does Group Disability Insurance mean?

Group disability insurance is a policy for a company, group, or organization which is meant to provide compensation for its members if they are unable to work and unable to get paid because of a disability.

Insuranceopedia explains Group Disability Insurance

A group disability policy can either be contributory or noncontributory.

It is contributory when members of the policy pay for the premium. It is noncontributory when the company or the organization itself pays for the policy and not the members.

Not all members of a group are qualified. A member may not be able to join because he or she has not reached the required length of employment necessary for inclusion in the policy.

The insurer might require a fixed number of people before it issues this policy. So, once a member drops out of the policy, the group has to find a replacement to fulfill the required number.

If a member leaves the group, he or she is no longer entitled to any coverage.

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