Merritt Personal Lines Manual: Type of Coverages Offered

Groups offer a wide variety of insurance coverages to members. The most common types are detailed next.

Disability Income -- Group disability income coverage provides for loss of income benefits due to a disability caused by an accident or sickness. The amount of benefits paid is usually a percentage of the insured's weekly or monthly compensation; such as 60 or 70 percent. This is intended to encourage the insured -- the disabled employee -- to recover and return to work. If 100 percent of compensation were provided, there would be no such incentive for the insured to return to work.

Benefits are payable following the policy's elimination period (EP). The EP is a waiting period during which the insured must be totally disabled as defined by the policy. An EP can be 7, 15, 30 days or longer.

Group benefits may be short-term or long-term. Short-term benefits are usually payable for up to one or two years -- though usually one year. Short-term policies usually have short elimination periods such as 15 or 30 days.

Long-term disability (LTD) benefits are usually paid out for longer benefit periods such as five years or until the insured turn 65. Generally, LTD policies will have longer elimination periods, such as 90 or 180 days.

Accidental Death And Dismemberment -- Accidental death and dismemberment coverage pays specified amounts for specific injuries or for death. Benefits are only payable if the injury or death is caused by accident. Injuries must result in specific losses such as loss of sight, arms, legs or feet.

This coverage can be written as a separate policy or as part of a policy providing other group health insurance benefits.