more information on disability income insurance, please call us toll free at 800 318 6050
Accumulation Period: A period
of consecutive months that begins on the first day of disability and during which the elimination period must be satisfied
Association Coverage: Group insurance issued to an
association rather than to the employees of a business or members of a union.
Increase Rider: An optional benefit which provides automatic increases each year at either
a stated percentage or the Consumer Price Index, despite changes in health, income or occupation.
Benefit Period: The longest period of time for which benefits are payable
for continuous disability. Typical benefit periods are 5 year, to age 65, to age 67 or lifetime.
Business Overhead Expenses: A policy that reimburses a business owner for
the day-to-day expenses of the business in the event of a disability. This type of policy usually has a one or two year benefit
Buy-Sell Agreement: An agreement made by
the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner's share of the business
and the exact terms of the buying and selling process are established before death or the onset of a disability.
Conditional Receipt: A receipt given for premium payment accompanying
an application for insurance. If the application is approved as applied for, the coverage is effective as of the date of prepayment
or the date on which the last of the underwriting requirements, such as medical examination, has been fulfilled.
Conversion Privilege: The right given to an insured person to
change insurance without evidence of medical insurability, usually to an individual policy, upon termination of coverage under
a group contract.
Cost of Living Rider: An optional
benefit which provides for increases in the disability benefit during periods of disability. The amount of increase is based
on a pre-set percentage or inflation.
In an overhead expense policy, the monthly benefit times the number of months the insured has been disabled
after the elimination period.
Earned Income: Gross
salary, wages, commissions, fees, etc., derived from active employment. This does not include investment income, rents, or
amounts received from annuities or insurance policies.
The consecutive number of days for which no benefits are payable at the start of a claim. An insured must be
disabled all of those days before benefits are payable. Typical elimination periods are 30, 60, 90, 180 or 365 days.
Exclusions: Certain conditions and causes which are not covered by
the policy. These are listed in the policy.
Future Increase Option (FIO/FPO):
An optional benefit in a disability income policy that allows the insured future increases to the policy monthly
benefit at specified dates (typically on insured's policy anniversary), with a requirement of only financial (and not medical)
Graded Premium: A premium structure
where premiums start out low and increase each year. If the insured starts with a graded premium, they may change to a level
premium on a policy anniversary. Premiums will then be based on attained age.
Insurance: A policy covering the employees of a business or members of a union.
Guaranteed Renewable: A type of insurance which cannot be cancelled
or altered by the insurance company as long as the insured continues to pay premiums on time. However, the premium may be
increased for classes of insureds
Level Premium: A
premium which remains the same through the insured's age 65.
Benefit: A benefit that is payable for the lifetime of the insured if continuously and totally
disabled before a specified age.
Loss of Income: The
difference between an insured's prior income and current income. In better policies, if the loss of income is more than 75%
of prior income, the loss is deemed to be 100% for purposes of the Residual Disability Rider.
Payee: The individual or entity named to receive all benefits.
Indemnity: The amount the insurer will pay for each month of total disability.
Non-Cancelable: A policy which cannot be cancelled or altered by the
insurance company as long as the insured continues to pay premiums on time, and whose premium will not increase up through
the insured's age 65.
Occupation: An insured's regular
occupation or profession at the time of becoming disabled before age 65.
As named in the policy schedule page, the owner's rights include, but are not limited to, the right to renew
the policy and to request any change in benefits.
Own Occupation: A term that defines the most liberal wording of the total disability contractual
provision. If the insured, due to sickness or injury can't perform the duties of one's own
Disability: An insured's physical inability to perform some, but not all, of the duties of
his or her regular occupation due to sickness or injury.
The total amount of coverage which will be allowed by a company from all carriers.
Policy: All material which constitutes the contract of insurance.
Pre-Existing Condition: An injury, illness, or physical condition
which existed prior to the issue of the disability policy.
The presumption that the insured is totally disabled, even if still at work, if sickness or injury results
in the total and complete loss of sight in both eyes, hearing in both ears, power of speech, or use of any two limbs. The
elimination period is waived from the date of the loss and total disability benefits are payable while such loss continues
until the end of the benefit period.
Prior Income: The
insured's average monthly income for the tax year with the highest earnings in the three years just prior to the date on which
he or she became disabled.
Recovery Disability Rider: A
rider which provides reduced benefits when and insured returns to work following a compensable period of total disability.
Recurrent Periods of Disability: In some policies, recurrent periods of disability from the same cause or causes will be considered
one continuous period of disability unless each period is separated by a recovery of six months or more.
Rehabilitation Benefit: A benefit paid to help meet some of the costs
an insured may incur by enrolling in a rehabilitation program for the purpose of returning to his or her occupation.
Residual Disability: In better policies, a disability that causes
an insured's income to fall more than 20% below its pre-disability level. Some companies include a loss of time requirement
or the inability to perform some duties of the insured's regular occupation.
Disability: The physical or mental inability to perform the major duties of one's occupation
because of sickness or injury.
Waiting Period: The
consecutive number of days for which no benefits are payable at the start of a claim. An insured must be disabled all of those
days before benefits are payable. Typical elimination periods are 30, 60, 90, or 180 days.
of Elimination Period: In some policies, the elimination period will be waived if an insured
becomes disabled within five years after the end of a period of disability which lasted longer than six months and for which
benefits were paid.
Waiver of Premium: In some policies,
a provision which relieves the insured of having to make premium payments after he or she has been disabled for 90 days, or
the elimination period, if shorter. In addition, premiums paid during those 90 days are refunded and premiums due during the
90 days after recovery are waived.
Worker's Compensation: Benefits
paid to a worker to compensate for losses caused by a work-related injury or illness.