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
Insurance coverage for accidents and sickness that are not job related. ...
Personal property insurance that provides all-risks coverage for wedding presents, wherever they may be in the world, until they are permanently located. Because the new owners of wedding ...
Strategy that provides that all income from assets in trust be paid at least annually for the life of the surviving spouse. This trust, which prohibits transfer of any assets to anyone ...
Coverage for specialists in various professional fields. Since basic liability policies do not protect against situations arising out of business or professional pursuits, professional ...
Sample of n elements selected from a population of A? elements in such a way that the sample has essentially the same characteristics as the population. The random sample serves as the ...
Policy permitting an insured to choose desired coverages. These policies are important for items with relatively low limits of coverage under standard property insurance forms. For example, ...
Minimum rate of return, in life insurance, guaranteed to a policyowner in calculating benefits for a life insurance policy. It is also used by an insurance company as the minimum rate of ...
Statement of the financial condition of the insurance company, as well as significant events during the year in which the company has been involved and/or that have affected the company. ...
Right of a beneficiary of a life insurance policy to exchange the future installments due that beneficiary for a lump sum distribution. ...
Have a question or comment?
We're here to help.