Page 122 - Group Insurance and Retirement Benefit IC 83 E- Book

However, a more recent trend among insurers is to require more medical exams and

financial information about individual group members. These stricter requirements have
arisen from the more liberal benefits appearing in many group DI plans-benefits similar

to those provided in high quality individual DI policies that offer greater monthly benefits
and fewer restrictions.

As long as individuals remain with the group, they have some measure of security that
the coverage will remain in place. Group plans may be canceled only if the insurer

cancels the entire group: no person's group coverage may be canceled individually

because of poor claims experience. While it's possible for a particular group's experience
to be so adverse an insurer might choose to cancel the entire group, this is a fairly rare

event. And finally, members of the group benefit from insurance rates that are lower than

individual rates. The lower cost is possible because the insurer's risk is spread among so
many people, most of whom will never have a claim. As a result, premiums from the

entire group help offset the disability claims that do occur.

Group DI Compared to Individual DI

How does group DI coverage compare to individual policies? Some of the primary

differences and similarities are presented in this section, and then expanded later under
the descriptions of short-term and long-term DI coverage. While direct comparisons are

difficult because of wide variations in benefits and other provisions among both types of
coverage, this section highlights typical differences.

Employee Benefit Regulations

Like all employer-sponsored group benefits, group DI is subject to both state and federal

regulation. Laws governing employee benefits address issues such as nondiscrimination.

employees' rights and privileges, dependents' rights and privileges, to name just a few.
The details of employee benefit plan regulation are beyond the scope of this course. If

you plan to work this market and you are unfamiliar with the area, we encourage further
study outside this course.