The typical disability insurance policy consists of several different types of coverage and your policy premium will depend on the types and amounts of coverage you choose. Scroll down to learn more about the terminology used in disability income policies. See disclaimer at bottom of page.
The person(s) or entity(ies) designated to receive an insurance policy’s death benefit. The various types of Beneficiaries are: Primary Beneficiaries (those first entitled to proceeds); Secondary Beneficiaries (those entitled to proceeds if no primary beneficiary is living when the insured dies); and Tertiary Beneficiaries (those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies).
The maximum amount of time you may receive benefits for each Continuous Disability. Subject to underwriting requirements, you may choose a Benefit Period of two years, five years or to your normal retirement age at 66 or 67.
Cash or Accrual Method
During a partial disability, while you are collecting benefits under the “residual” provision, proof of loss of earnings is required. You can choose the accounting method, cash or accrual, that is best for you to determine monthly earnings. However you must use the same method for any one disability.
The first day of covered disability immediately following the completion of the Waiting Period.
A Disability caused by more than one Injury or Illness. Benefits for a Concurrent Disability will be paid as if there is only one Injury or Illness. In no event will you be considered to have more that one Disability at the same time. Once a continuous period of Disability starts, it will be one period of Continuous Disability no matter what Injuries or Illnesses, or how many, caused the Disability or cause it to continue.
Given to policyowners when they pay a premium at the time of application. Interim coverage during the underwriting process may be provided subject to the terms and conditions of the receipt.
Recurrent periods of Disability from the same cause or causes are one period of Continuous Disability if separated by Your Recovery of less than twelve full months.
Cosmetic or Transplant Surgery
After six months of coverage, total disability due to cosmetic surgery or transplant surgery will be considered the same as total disability due to Illness.
Any payment or payments for Disability that are made under the policy provisions.
The date on which the policy becomes effective.
Future Purchase Option Rider
This Rider allows you to buy additional monthly Benefits on specific option dates regardless of your health as long as your earned income at that time justifies the increase.
The 31-day period immediately following the due date of all premiums except the first. The policy will continue in force during the grace period. If a premium is not paid by the end of its grace period, all coverage will end as of the premium due date.
As long as premiums are paid by the end of each Grace Period, we cannot change any part of the policy except its premium. After three years we can change the premium but only if the change applies to all policies with like Benefits insuring the same Risk Class.
Indexed Cost of Living Indemnity Benefit Rider
This rider pays an additional monthly benefit tied to the change in the Consumer Price Index, starting on the 366th day of disability, while a total or residual benefit is payable. This additional benefit is recalculated annually for each year of Continuous Disability.
Accidental bodily injury sustained by you:
After the Effective Date; and
While the policy is in force.
Insurance Company Ratings
Provide information on insurance company financial performance, stability claims paying ability, and more. The five major insurance industry ratings services are: A. M. Best, Standard & Poor’s, Moody’s, Duff & Phelps, and Weiss. Their top ratings are: A. M. Best= A++, Standard & Poor’s= AAA, Moody’s=Aaa, Duff & Phelps=AAA, Weiss=A+.
Usually conducted by a licensed paramedic. The medical report is part of the application, becomes part of the policy contract and is attached to the policy.
Changes the policy and all riders from Guaranteed Renewable to Non-cancelable and Guaranteed Renewable. Provided that all premiums are paid by the end of each Grace Period, we cannot change the policy or its premiums.
Any mental or physical condition for which:
You have consulted a Physician; or
You have received medical treatment or services; or
You have taken prescribed drugs or medications; or
A reasonably prudent person would have sought medical advice, care or treatment during the 365-day period ending the day before the policy’s Effective Date.
Preferred Risk Class
A class of individuals whose anticipated mortality or morbidity (based on health, family medical history, occupation, etc.) is lower when compared to the Standard Risk Class.
The periodic payment required to keep an insurance policy in force.
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.
Your occupation at the time Disability begins. If you have limited your practice to a professionally recognized specialty in medicine or law, the specialty will be deemed to be your Regular Occupation.
If you join a vocational rehabilitation program, approved by us, while you are receiving total disability benefits, we will continue these benefits for up to 36 months, and we will pay any reasonable costs for the program not paid by other plans, policies or programs.
Residual Disability Rider
Provides a reduced Basic Monthly Benefit if you are not Totally Disabled, but you are Residually Disabled.
Any supplemental agreement attached to and made a part of the policy that expands or limits the policy’s conditions, coverage, or benefits.
A higher premium rate charged to applicants who use tobacco products. Insurers will generally give a lower premium rate to buyers who do not smoke or use tobacco. If you smoked in the past, most carriers will consider you a non-smoker if you have not smoked for one year prior to applying for coverage. Consumers should be aware that nicotine can be detected in a variety of routine screening tests that are now commonly required by most insurance companies.
Standard Risk Class
A class of individuals whose anticipated mortality or morbidity, according to a company’s underwriting standards, is regarded as average. Most insured are included in the Standard Risk Class.
Supplemental Social Insurance Rider
If you are receiving a Benefit for Total Disability under a policy, this Rider will pay additional Benefits, less any Legislated Benefits (such as Social Security or Workers Compensation) paid to you, for the same period. This Benefit will be paid monthly. This payment is in addition to any other benefits payable under a policy.
An amount payable to the policyowner, the policy owner’s estate, or the policy owner’s designee should you die while receiving total disability benefits.
Term of Policy/Policy Renewability
Period for which the policy runs. Disability Insurance is often annually renewable to normal retirement age. Some policies may continue after that as long as the policyholder continues actively working and pays the required premium.
Total Disability/Totally Disabled
You are totally disabled if, due to injury or sickness, you are:
Unable to perform the substantial and material duties of your regular occupation;
Not engaged in any other gainful occupation; and
Are under the care of a physician appropriate for your injury or illness.
Total Disability in Your Occupation Rider
Changes the definition of Total Disability by allowing you to engage in another gainful occupation while you are Totally Disabled from your Regular Occupation.
Company receiving premiums and accepting responsibility for fulfilling the policy contract. Also, company employee who decides whether the company should assume a particular risk.
An individual who is not accepted for insurance due to excessive risk of loss.
That period, measured from the first day of Your Disability, throughout which you must be Disabled before Disability Benefits become payable.
Waiver of Premiums
Exempts the insured from paying premiums after he or she has been Continuously Disabled for a specified period of time.
THE DEFINITIONS PROVIDED IN THIS WEB SITE ARE INTENDED FOR GENERAL REFERENCE ONLY. ANY COVERAGE ISSUED IS SUBJECT TO THE TERMS OF THE POLICY, WHICH MAY CONTAIN OTHER EXCLUSIONS AND RESTRICTIONS. SOME POLICY PROVISIONS MAY VARY BY STATE. PRODUCTS MAY NOT BE AVAILABLE IN ALL STATES.