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
Procedure in which a home office interviewer (who may or may not have underwriting experience) interviews applicants on the telephone. The questions asked the applicant are automated and ...
Type of charitable remainder trust (CRT) that pays interest income for life or for a specified term to a non charitable beneficiary. The remainder of the interest is received by a charity. ...
Bodily injury liability and property damage liability expressed as a single sum of coverage. ...
Right of a policyholder, in life insurance with cash values, to continue full coverage for a limited period, as shown in a table in the policy, with no further premiums payable. ...
Individual who works in the home office of an insurance company and performs the function of underwriting to determine if an applicant is insurable at standard rates, substandard rates, ...
Premium required by an insurance company for plans subject to premium adjustment. The initial provisional premium is paid to put a commercial property or liability insurance policy into ...
Coverage that is renewable at the option of the insured, who is not required to take a medical examination. Regardless of physical condition, the insured must be allowed to renew the policy ...
Probability of one's living to a specific age according to a particular mortality table. Life expectancy is the beginning point in calculating the pure cost of life insurance and annuities ...
Annuity contract. If the annuitant dies before receiving income at least equal to the premiums paid, a beneficiary receives the difference in installments. If the annuitant lives after the ...
Have a question or comment?
We're here to help.