Long Term Disability Insurance For Groups as Small as Two (2)

Updated 9-18-2024

Some insurers have reduced the minimum group size to qualify for guaranteed issue long term disability insurance to two (2) lives provided certain qualifying criteria are met, including:

(a) The business has been established for at least one (1) year.

(b) All owners and employees that work thirty (30) hours per week must be covered unless the covered population is at least ten (10).

(c) A thirty (30) hour per week Actively at Work definition is required. It is not possible to cover an employee that works fewer than thirty (30) hours if the number of eligible lives is under ten (10).

(c) A pre-existing condition limitation will be required for the first 12 to 24 months of coverage, depending on the carrier. Exceptions may apply if the group is replacing existing coverage.

(d) The overall risk given the industry, occupations, and ages of the members needs to be favorable. Tree trimming companies, for example, would not be eligible. Neither would a firm that is comprised solely of three men in their 60's.

Do We Need to Cover Everyone?

Discrimination is perfectly legal with disability insurance, but is practical only when the covered group population is at least 10 members due to insurer guidelines. Larger groups can restrict eligibility to members that have served more than a certain number of months or to exempt members (exempt from L&I).

Regardless of group size, it may be possible to achieve the same result by using individual policies that require full medical and financial underwriting.