Disability Income
Protects against your loss of net earned income (after
taxes) in the event you should become totally disabled due to the perils of sickness or accident. This type of insurance policy is designed to pay a weekly or monthly income to replace lost salary or
Total Disability
You cannot perform your own job for the first two years after onset of your sickness or injury. Your disability must also be
medically defined
Loss-of-earnings test for total disability
In order for benefits to continue, you must prove to the insurance company that you are incapable of performing any job for which you are reasonably suited by education, training or experience
Medically defined total disability
You must also be confined to the house and under the treatment of a doctor, who must continue to ascertain periodically (usually every six months) that your total
disability is continuing
Presumptive Disability
Specifies certain conditions that automatically qualify the insured for the full benefit. Includes Blindness, Deafness, Loss of Speech and Loss of Two or more Limbs.
Permanent Disability
A disability that prevents the insured from ever working again. This type of disability results from injury to a limb or organ that you are unable to recover from, such as loss of an eye, hand or foot
Temporary Disability
The period of time that you are unable to work while you are
recovering from an illness or injury, for example, a broken leg or a bout with valley fever
Accidental Means Clause
This clause will cover accidents only if the cause is unintentional and unforeseen
Accidental Bodily Injury Clause
Any injury that is the result of an accident is covered
Basic Total Disability Plan
Will provide monthly benefits in the event the insured becomes totally disabled as defined in the policy after the
elimination or waiting period has been satisfied
Income Benefits
Reimburse the insured for loss of income due to either accident or sickness. Collecting two separate benefits
simultaneously is not permitted
Elimination Periods
The benefit amount is usually the same for either sickness or injury. The time limit for sickness can usually be anywhere from seven days to six months. The time limit for accident coverage is usually shorter or there is no elimination period at all. Also
Benefit Period
The amount of time you receive a benefit
Recurrent disability
When a second period of disability later arises due to the same cause as a prior disability. If the insured, returns to work for less than a certain period of time (usually 90 days), and suffers a recurrence of the same disability, it will be treated as a
Waiver of Premium Ride
Specifies that in the event of disability, premiums will be waived by the insurer retroactively to the beginning of the disability if the insured is permanently and totally
disabled for more than six consecutive months
Coordination with Social Insurance and Workers Compensation Benefits
Insurers often add social insurance supplement riders to Disability Income policies, which state that disability benefits will be paid only until Workers' Compensation or Social Security benefits begin. If, for any reason, government benefits stop, the in
Additional Monthly Payment Rider
A rider designed to provide Disability Income benefits during the period of the claim while the insured is waiting for Social Security benefits to begin
All or Nothing Rider
Will pay benefits if Social Security denies the claim. However, if Social Security covers, the rider pays nothing
Offset Rider
Will pay the difference between what Social Security pays and the insured's Disability Income benefits
Social Insurance Supplement (SIS)
Designed to supplement various government programs. May be combined with Workers Compensation or state disability funds. These benefits are usually paid during waiting
periods for other social insurance benefits or when social insurance benefits have been
Partial Disability
Ability to perform some, but not all, of the duties of the insured's occupation as a result of injury or sickness.
Residual Disability
Pays benefits for loss of earnings after a return to work if the insured cannot earn as much as he or she did before becoming disabled. This may include such things as: working fewer hours than normal but performing all of the tasks of your occupation, or
Cost of Living Adjustment (COLA) Rider
The insured's monthly benefit will be automatically increased during the period the insured is receiving monthly payments. Increases are usually tied to the Consumer Price Index
Future Increase Option (FIO) Rider
Enables the insured to purchase additional coverage, regardless of insurability, at specified future option dates
Relation of Earnings to Insurance
If you have multiple policies, and you have a claim, each policy will share proportionately in your loss
Accidental Death and Dismemberment (AD&D) Rider
Covers accident only--sickness is not covered. Pays a specific sum if you die as a result of a certain covered accident or become dismembered. It is considered to be a very restrictive coverage with many exclusions. Principal sum & Capital Sum (50%)
Rehabilitation Benefit
Pays a lump sum benefit for necessary vocational training to help the insured prepare for a new career field
Medical Reimbursement Benefit Rider
Pays a lump sum for payment of medical expenses
incurred due to injury which does not result in total disability. Sometimes called the Non-Disabling Injury Rider
Return of premium rider
Expensive--this rider may be attached to a Disability Income policy. For an additional premium, a portion of the premiums, minus the claims paid during the time period are refunded to the insured
Exclusions
Disability Income insurance exclusions are losses arising from war, military service, attempted suicide, overseas residence, aviation and certain circumstances and losses that occur while committing a felony
Non-occupational Coverage
Covers you only off the job
Occupational Coverage
Covers you both on and off the job
Probationary period (Pre-existing Condition Clause)
Applies to sickness or illness only for Disability Income as well as Medical Expense policies--generally 12 months or less
Elimination Periods (Waiting Periods)
A period of time the insured must "wait" before benefits will be paid for a covered accident or sickness. Usually 30 days, but it can be as long as six months (180 days). Benefits are not retroactive
Long-term Disability (LTD)
Individual or group policies that usually provide coverage for two years or more, often to age 65
Short-term Disability (STD)
Group disability insurance written with short waiting or elimination periods (usually 30 days or less) and short benefit periods, usually six months to two years
Key Employee (Partner) Disability Income
The business buys a Disability Income policy covering both
business partners. Some policies are set up to provide the disabled key person with salary continuation as well as funds necessary to hire and train a replacement. Other policies pay benefits dire
Business Overhead Expense Policy
Does NOT pay your loss of income, it pays your ongoing business expenses that will continue even while you are sick or injured. Premiums are tax deductible and benefits are taxed.
Disability Buy/Sell Policy
Disability Income coverage may be structured so that the
funds are paid to the business to buy out the interest of the disabled business partner, with a Buy/Sell Agreement funded by disability insurance policy proceeds
Disability Reducing Term
Business may incur a loan or other financial obligation that requires monthly payments. In some cases, the monthly payment can be made only as long as the owner remains able to run the business. To protect the financial obligation -- and the assets that c
OASDHI
Old
Age--Retirement
Survivors--Death
Disability Income
Health
Insurance--Medicare
Social Security Total disability
The disability must be expected to last at least 12 months or result in death and it must prevent you from performing
"any gainful work.
Social Security Benefit requirements
1) You must be under 65
2) You must be fully insured--you have to have contributed to SS at least 40 quarters (10 years)
3) You can not perform any job
4) Your disability has to be expected to last at least 12 months
or result in death
5) You must incur a