If a severe disability struck, the kind where it’s impossible to perform life’s most basic activities without assistance, would your clients have enough income to get by?
Traditional income protection would provide approximately 60% of your client’s pre-disability earnings. However, your client’s expenses are likely to dramatically increase should a catastrophic disability occur.
By adding the Catastrophic Disability Benefit (CDB) rider to their individual Disability Income (DI) Insurance policy, clients could receive up to 100% of their pre-disability income to help cover expenses in those types of situations.
The rider offers a minimum monthly benefit of $500, up to a maximum benefit of $8,000 (depending on the client’s income). AND it is in addition to the base monthly benefit.
Together, the rider and base policy benefit replace a higher percentage of a client’s income to help them account for the extra expenses that often accompany a catastrophic event.
CDB benefits could be paid if your client is ADL disabled, cognitively impaired or presumptively disabled.
* Activities of Daily Living (also known as ADLs): Functional everyday activities used to measure a person’s ability to live independently.
ADLs include such things as eating, dressing, bathing, toileting, transferring and continence.
* Cognitively Impaired: a deterioration or loss in intellectual capacity that
(a) places a person in jeopardy of harming him or herself or others and, therefore, the person requires substantial supervision by
another person; and
(b) is measured by clinical evidence and standardized tests which reliably measure impairment in:
(1) short or long term memory;
(2) orientation to people, places or time; and
(3) deductive or abstract reasoning.”
* Presumptive Total Disability:
Your total and permanent loss, because of your injury or illness, of one of the following:
Hearing in both ears, not restorable by hearing aids
Sight in both eyes (see below)
Use of both hands
Use of both feet
Use of one hand and one foot
Total and permanent loss of sight in both eyes means that both eyes must measure at or below 20/200, after reasonable efforts are made to
correct their vision, using the most advanced medically acceptable procedures and devices available.
Contact your RAM GROUP DI Sales Rep to learn more about income protection, and the advantages of the Catastrophic Disability Benefit rider.
Author Credit: Thomas Nicols CLU, FLMI, ACS