Disability Income Insurance
Health insurance that provides income payments to the insured wage earner when income is interrupted or terminated because of illness, sickness, or accident. Definitions under this insurance include:
- Total and Partial Disability reduction in benefits if the insured is found to be partially disabled instead of totally disabled.
- Amount of Benefits many policies stipulate that all sources of disability income cannot exceed 50% to 80% of the insured's earnings prior to the disability, subject to a maximum absolute dollar amount.
- Duration of Benefits length of time benefits will be paid. Some policies will pay benefits for one or two years, whereupon the insured must agree to be retrained for other work. Other policies pay benefits as long as the insured is unable to do the job for which he or she is suited by training, education, and experience (often up to age 65, when retirement programs take over). Some policies pay lifetime benefits.
- ELIMINATION PERIOD (Waiting Period) period beginning with the first day of disability, during which no payments are made to the insured. The longer this period, the lower the premiums.
- Physician's Care the insured must be regularly attended by a legally qualified physician because it is necessary to assess changes in severity of disability.
- PREEXISTING CONDITION if an insured has a preexisting injury, sickness, or illness, most policies will not pay income benefits either for the duration of the policy or until a period of time (usually from six months to one year) has elapsed.
- Recurrent Disability most policies will not pay income benefits to an insured who is experiencing a recurrent disability unless the recurrent disability is deemed a new disability. Some more progressive policies define a recurrent disability as a new disability if there has been a break of at least six months between the first disability and the current disability, and the insured has returned to work during that break.
- RESIDUAL DISABILITY many policies pay for the unused portion of the total disability period, limited to age 65.
Popular Insurance Terms
method of gaining illegal entry to perform a criminal act. If a policyholder makes a claim for loss of jewelry or rugs under a homeowners policy, or if a business owner makes a claim for ...
Form of inland marine insurance under which an insured is indemnified for damage or destruction of his or her on-premises property if it is due to radioactive material stored or used within ...
Unexpected, unforeseen event not under the control of the insured and resulting in a loss. The insured cannot purposefully cause the loss to happen; the loss must be due to pure chance ...
Methods for payment of the value of a policy. An insurance company can select one of three options in settlement of a loss: make a cash payment; take possession of damaged or destroyed ...
Membership organization of state insurance commissioners. One of its goals is to promote uniformity of state regulation and legislation as it concerns the insurance industry. The NAIC ...
Insurance transactions conducted across national boundaries. Such transactions occur when the insurance company sells insurance outside the country of the company's domicile. ...
Coverage for extra expenses associated with the reconstruction of a damaged or destroyed building where zoning requirements mandate more costly construction material. This endorsement is ...
Intent to defraud. An insured is required to answer truthfully all questions on the application. The insurance company can void a contract if it would not have issued a policy had it known ...
Financial instrument such as a fixed dollar annuity or bond that pays a minimum periodic income at a minimum guaranteed rate of interest. ...
Have a question or comment?
We're here to help.