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
State operated insurance company used in workers compensation insurance in some states where the risks are so great that the commercial insurance companies cannot operate at affordable ...
Coverage for the insured's personal and real property and the insured's own person. Contrast with third party. ...
Plan wherein total withdrawal or income payments from tax deferred savings plans exceed $150,000 in any one year. An excess distribution tax of 15% of the amount greater than $150,000 must ...
Application of conventional terms and conditions to the reinsurance of a risk. Contrast with non-traditional REINSURANCE. ...
Right of one party to use land owned by another party. For example, an electric utility can obtain an easement through court action to place its power lines across someone's property, even ...
Type of inland marine insurance that covers pipelines. Although pipelines are stationary, the coverage is written on inland marine forms because they are considered part of the ...
Theory that the probability that two independent events will occur is equal to the probability that one independent event will occur times the probability that a second independent event ...
Coverage for an advertiser's negligent acts and/or omissions in advertising (both oral and written) that may result in a civil suit for libel, slander, defamation of character, or copyright ...
Method of premium payment under which a temporary premium is charged based on projected loss experience. At the end of the year this premium is adjusted to reflect the actual loss ...
Have a question or comment?
We're here to help.