Grouped Individual Disability Insurance - Income Replacement Benefit

Professional groups such as accountants, architects, dentists, doctors, engineers, lawyers, physicians, pharmacists, and veterinarians, often use grouped permanent individual disability insurance rather than yearly renewable group long-term disability insurance policies. This approach stabilizes the cost of disability insurance as well as provides a boost in perceived value of the employee benefit.


  • no medical evidence for groups with 20 or more employees (guaranteed standard issue)
  • $2,000 to $7,500 monthly benefit replaces or integrates with group LTD coverage
  • coverage continues and is paid for by employees upon termination
  • improved policy wording, cost-of-living-allowance, retirement savings bonus
  • premium non-taxable benefit if employer pays cost, but claims will be taxable
  • claims are non-taxable if employee pays the premium

Cost Savings:

  • price guarantee (Group disability insurance premium rates are adjusted annually based on the age, gender and occupation risk of the active staff and adjusted for the claims experience of the group. An aging group with low turnover or one that has high claims experience may find it cost-effective to shift some or all of the disability risk to individual policies at fixed prices.)
  • 30% discount to individual rates
  • no retail sales tax


  • 24m/24m pre-existing condition clause (Disabilities that occur during the first 2 years are excluded if the condition existed during the 2 years prior to becoming covered.)
  • if the employer pays the premium it must be structured as a Wage Loss Replacement Plan