One Major Risk..
individuals face in their lifetime is the possibility that they will become totally disabled and be unable to perform work duties for a period of time. Statistics show that there is a 50% chance of a 25 year old being disable for more than 90 days prior t
Disability Income Insurance
designed to replace lost income in the event of this contingency, and is a vital component of a comprehensive insurance program. It may be purchased individually or through an employer on a group basis
Basic Total Disability Plan
a total disability plan protects the family or an individual against the economic loss that comes with the total disability of the wage earner
Income Benefits
most often, benefits are paid month, but could be paid weekly in some policies
Elimination and Benefit periods
Elimination period is a waiting period that is imposed on the insured from the onset of disability until benefit payments commenct. It is a deductible measured in days, instead of dollors. Benefit period refers to the length of time over which the month d
Injury vs. Sickness
Injury is defined using either the "accendatl bodily injury" definition of the "accidental means" definition. Sickness or illness is defined as either a sickness or disease contracted after the policy has been in force at least 30 days; or a sickness or d
Individual Disability Income Insurance
An individual disability income policy is applied for and paid for by the individual rather than through the employer as for group disability income. Individual disability income premiums are paid with after-tax dollars and benefits are not income taxable
recurrent disability
generally expressed in a policy provision that specifies the period of time (usually within 3-6 months), during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability. The significance of this fea
Waiver of Premium Freature
usually included in a basic disability income policy. This benefit allows the insured, when disabled, to forego paying the premiums once he/she qualifies for benefits
Partial Disability Benefit
defined as the inability to perform one or more of the regular duties of one's own occupation or the inability to work on a full-time basis, which results in a decrease in the individual's income
Residual Disability Benefit
the type of disabilty income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to work as long or at the same level he/she worked before becoming disable
Additional Month Benefit
some insurance companies offer the additonal monthly benefit rider in the approximate amount that social security would pay. the benefit only is provided for one year. it is then anticipated that social security benefits would commence at the end of one y
Social Insurance Supplement
These provide for the payment of income benefits in the event that: 1. the insured is eligible for social security benefits but before the benefits begin; 2. if the insured has been denied coverage under social security; 3. when the amount payable under s
Occupation vs. Nonoccupational Coverage
Health insurance, including disability insurance, can be written on an occupation or nonoccupational basis. Occupation coverage provides benefits for illness, injury, or disability resulting from accidents or sicknesses that occr on ro off the job. Nonocc
Cost of Living Adjustment Rider
the purchasing power of disability benefits can be eroded by inflation. The cost of living adjustment rider will help protect against inflation. Under this rider the insured's monthly benefit will be increased automatically, once claim payments have begun
Future Increase Option Rider
guaranteed insurability rider, also refereered to as the future increase option, allows an insured to increase the benefit level to a specific predetermined amount at certain times or on certain occasions without proof of insurability
Rehabilitation Benefit
if the insured has been totally disabled it is quite possible that rehabilitation will be necessary to help get the insured back to work, either in their old occupation or in another occupation. THis benefit will cover a portion of the cost of rehabilitat
Medical reimbursement benefit (nondisabling injury)
this benefit proves for the payment of medical expenses incurred due to an accidental bodily injury when the insured is not disabled
Return of Premium
the return of premium rider provides a refund of a percentage of premiums at certain times. For example, at the end of the tenth year, the insurance company may offer to refund 80% of the excess of premiums paid over claims
Cash Surrender Value
the cash surrender rider creates a cash value around 70% of the premiums paid in excess of claims. This cash value is often only available to the owner at the termination of the contract
Pure Loss of Income
income replacement contracts are policies which replace a certain percentage of the insured's income lost due to a covered accident or sickness, without first requiring a period of total disability
presumptive disability
a provision that is found in most disability income policies which specifies teh conditions that will automatically qualify the insured for full disability benefits
requirement to be under physician care
most disability income policies require that the insured be under the care of a physician and possibly confied to the house in order to receive benefits
Occupation Considerations
in disability income policies, the insured's occupation is a critical underwriting factor
Benefit Limits
disability income policies are valued contracts (or stated amount contracts). The amount of benefit that the insurance company will issue is based upon the applicant's net earned income. Most companies will set a maximum percentage of the applicant's earn
Group Disability Income Insurance
Disability income insurance is not only avaible in individual policies but also in group benefit packages provided by employers. Disability benefit paymets that are attributed to employee contributions are not taxable, but benefits payments that are attri
Group vs. Individual Plans
Group plans usually specify the benefits based on a percentage of the worker's income while individual policies usually specify a flat amount; short-term group plans usually provide maximum benefit periods of 13 to 26 weeks, with weekly benefits of 50% to
Short Term Disability
it is not uncommon for an employer to provide short-term disability benefits for all the company's employees
Long Term Disability
group long-term disability plans are often reserved for management employees
Key Person disability
key person disability is purchased by the employer on the life of a key employee. The key person's economic value to the business is determined in terms of the potential loss of business income which could occur as well as the expense of hiring and traini
Business Overhead Expense Policy
BOE insurance is a unique type of policy that is sold to small business owners who must continue to meet overhead expenses such as rent, utilities, employee salaries, installment purchases, leased equipment, etc, following a disability. The premiums paid
Disability Buy-Sell Policy
A buy-sell agreement is a legal agreement prepared by an attorney. The buy-sell agreement specifies how the business will pass between owners when one of the owners dies or becomes disabled. It is common for the business to purchase insurance to provide t
Social Security Disability
social security is a federal program enacted in 1935 that is designed to provide protection for eleigible workers and their dependents, against financial loss due to old age, disability or death. In other words, Social Security can be though of as federal
Qualifications for Disability Benefits
Social security usues the quarter of coerage system to determine whether or not an individual is qualified for social secrutiy benefits. The type and amount of benefits is determined by the amount of creds or QCs a worker has earned. Anyone working in job
Definition of Disabilty
assuming that one qualifies for social security disability benefits by being fully insured or partially insured, one must then meet social security's definition of disability. Disability, under social security, is defined as the inability to engage in any
Waiting Period
the elimination period for Social Security disability benefits is 5 months
Disability Income Benefits
social security disability benefits will continue for 3 months when a person returns to work making more than $500 per month. This is an incentive to get people back to work