Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group.
Group insurance may or may not be converted to individual coverage. As group insurance gets big business for an insurance company with minimum operational expenses (under one master policy issued to an employer, union or any recognized group), it is usually less expensive than individual policies.
Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance who belong to the group for reasons other than for the purposes of obtaining insurance. In other words, people belong to the group not because they possess some high-risk factor which makes them more apt to purchase insurance (thus increasing adverse selection); instead they are in the group for reasons unrelated to insurance, such as all working for a particular employer. We provide you with information of group insurance experts, please compare before applying.
Understanding Your Group Disability Insurance Benefits
It's amazing how many people have group Long-Term Disability insurance through their employer but understand nothing about what it provides them. When speaking of something as important as income protection, it is important for people to know what they have, and what they don't have so they can best protect themselves, their family and their future.
Before going into the details, it is best to understand what Disability insurance is and what it does. Disability insurance is a financial product used to insure a person's ability to work and earn an income. For most professionals - if you work, you get paid and if you do not work, you don't get paid. The purpose of Disability insurance is to insure that if you become unable to work due to an injury or illness, you continue to earn a percentage of your income.
So now you understand what Disability insurance is, but how does your group coverage actually work? My advice is that everyone should review his/her actual benefit package in order to get a better understanding of the plan design. Having an insurance adviser review this information with you could be helpful as well.
Every Long-Term Disability insurance contract will have an elimination period and benefit period. The elimination period is the period of time that must be satisfied before benefits will be paid and the benefit period is the maximum period of time for which benefits will be paid. Unless you work for the Government, you can expect that your group Long-Term Disability insurance benefits will include a 90-day elimination period and a benefit period payable to age 65.
One of the most important things you will want to know is the benefit amount your group plan provides. Most people can expect for their group Disability insurance benefits to equal 60% of their annual income. Higher earners should pay close attention to plan maximums however because most group plans will have a maximum benefit of $6,000/month. For someone earning over $120,000 annually, $6,000 of monthly benefit will be less than 60% coverage. Additionally, you should understand the taxation that occurs when benefits are claimed. If you pay the premiums yourself, your benefits will most likely be payable on a non-taxable basis (unless premiums are paid pre-tax). If your employer pays the premium, then you can expect that benefits will be taxable at the time of a claim. Consider this carefully, a taxable 60% benefit will actually only provide around 45% income replacement.
Another important factor to understand is how your group Disability insurance will determine your eligibility for a claim. In order to do this, we look to the Definition of Disability that your policy provides. Again, in order to truly know what your coverage provides, you should review your actual benefits package, however most people can assume that they will have an Own-Occupation definition for the first 24-36 months of a claim and an Any-Occupation definition from that point forward. This means that for the first 24-36 months, you are considered totally disabled if due to an injury or illness you are unable to perform the material duties of your regular occupation (what you are doing at the time of disability). If you remain disabled beyond the Own-Occupation period, you will be considered disabled only if due to an injury or illness you are unable to perform any occupation for which you are reasonably qualified based on education, experience or training. Essentially this means that for the first 24-36 months you are properly protected, but beyond that point, the insurance company can dispute your claim and require you to work in a different profession, if you are capable of doing it.
Hopefully, by this point you have a better understanding of how your group Disability insurance benefits work and how they are paid. So now it is important to understand some of the restrictions and limitations that exist with group Disability insurance in comparison to individual coverage.
To start, group Disability insurance benefits will offset by other benefits that you receive, such as Social Security. This means that every dollar you receive from Social Security disability will replace one dollar of your group Disability benefits. The same thing is likely to occur with income received from several other sources as well. Look in your benefits package under "other income benefits" to see the list of benefits tat will be offset.
One of the good things about group Disability insurance is that there is generally no medical underwriting, which means that everyone qualifies. For this reason, insurance companies will normally have a pre-existing condition clause that restricts the benefits paid for any condition you've been consulted or treated for within 12 months of the coverage effective date. These benefits will usually be restricted to a small percentage, about 30% of the regular benefit you would receive. Additionally, your group Disability insurance is very likely to limit benefits paid on a Mental/Nervous condition, to a 24-month benefit period.
Lastly, Group Disability insurance benefits are not transferable, meaning that if you change jobs, your benefits do not go with you. For many people this can be a very big concern because their health may not allow them to qualify for individual coverage.
Group Disability insurance benefits are nice to have, especially if your employer is paying for it. However, it should not be the only Disability insurance you have. A person's income is his/her most valuable financial asset, and without it, most people and families would suffer a severe financial hardship. Now that you understand how your group Disability insurance benefits work and also where they fall short, you should speak with an insurance advisor, have them review your group policy and see if there is an opportunity of obtaining individual coverage to supplement the gaps in your group coverage. Who knows - you may just need it down the road.
Michael Relvas is a Life and Disability insurance specialist with MR Insurance Consultants. He provides individuals and businesses with personalized information, advice and assistance in protecting their income with affordable Own-Occupation Disability insurance. To learn more about your options, call 1-800-817-4522 or Contact us.
Article Source: http://EzineArticles.com/?expert=Michael_Relvas
You've probably seen your vehicle rated within a car insurance group. However, what are these car insurance groups, how do their rankings work and how will they affect your premiums?
Car insurance groups work quite simply - the higher the group, the larger the premium you will pay. At the moment there are 20 groups, but this must be expanded to 50 by December 2009. By listing a certain vehicle within a car insurance group, buyers can budget for their long term costs by getting a rough idea of how steep their premiums are likely to be.
The groups themselves are set by the Group Rating Panel, which includes the Association of British Insurers and Lloyds Market Association. The panel meets on a monthly basis to recommend an insurance group for all new passenger cars based on research conducted by the Motor Insurance Repair Research Centre.
So how does the panel determine which cars belong in which groups?
Repair costs are the strongest consideration by the panel because repairs account for more than half of the money paid out on claims. However, there are several other factors to consider too.
For example, the prices of new cars are taken into account as they are often indicative of the cost of a replacement model. The availability of body shells is considered because they are essential for certain accident repairs; and the car's performance is also deemed an important factor because generally higher performance cars are involved in more costly car insurance claims.
Another factor considered in the car insurance grouping is security - clearly the higher the standard security features on a car, the less likely it is to be stolen.
If your vehicle does not have good security features as standard, the good news is that this is something you can address and potentially earn cheap car insurance as a result. Most car insurance providers will cut your premiums if you add high security door locks, alarms, immobilisers, tracking devices, coded audio equipment and other security features.
Article Source: http://EzineArticles.com/?expert=Alex_Gregory
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