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
Physical damage to one's person. The purpose of liability (casualty) insurance is to cover bodily injury to a third party resulting from the negligent or intentional acts and omissions of ...
Interest earned on dividends from a participating life insurance policy left on deposit with the insurance company and subject to taxation. ...
Error, misstatement, or breach of duty by an officer or director of a company that results in a lawsuit against the company. directors and officers liability insurance covers claims arising ...
Policies that have been sold to and paid for by an insured, but not yet delivered to the insured. ...
Option in a participating policy under which dividends are used to purchase fully paid-up units of whole life insurance. This option deserves careful consideration by young families since ...
Acts or omissions that result in suits against an individual and/or residents of the individual's household for actual or imagined bodily injury and/or property damage to a third party. ...
Intense combustion resulting in a flame or glow. In order for the fire peril to be covered under property insurance, the fire must be a hostile fire, not a friendly fire. ...
Yearly renewable term (YRT) life insurance under which an insured can usually re-apply for term insurance every fifth year at a lower premium than the guaranteed renewal rate. If the ...
Provisions added to an original insurance policy that alter or modify benefits and coverages of the contract. For example, a homeowners insurance policy can be endorsed to cover a ...
Have a question or comment?
We're here to help.