The percentage of the insured's pre-disability income upon which the payabel benefit is based, up to an overall maximum benefit.
The longest period of time for which benefits are payable for continuous disability.
Business Overhead Expenses
The usual expenses required to maintain an office or run a business.
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.
Capital Sum Benefit
The benefit provided when the insured suffers the loss of a hand or foot, severed through or above the wrist or ankle, or loss of the entire sight in one eye with no chance of recovery. The loss generally must be the result of sickness or injury that the insured has survived for at least 30 days.
A receipt for premium payment accompanying an application for insurance. If the application is approved as applied for, the coverage is effective on the later of the date of prepayment or the date on which the last underwriting requirement was received by the insurance company.
Consumer Price Index
A measure of inflation that quantifies the rate of change in the cost of living in the United States.
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 that provides for increases in disability benefit during periods of disability.
An insured's monthly benefit times the number of months the of disability after the elimination period.
An insured's monthly expenses during a residual disability.
All income received by the insured during a residual disability.
Definition of Partial/Residual Disability
The actual terms and detailed description of "disability" sometimes used to describe when an insured is able to return to work part-time or even full-time (with a loss of earnings). If working in this limited capacity and is earning less than a certain level of income, the insured may still be eligible for limited benefits.
Definition of Total Disability
The actual terms and detailed description of "disability" that will be used to determine an employee's eligibility for benefits. Examples include but are not limited to:
- Own Occupation (Own Occ) Under this definition, an insured will be considered disabled only if he/she is unable to perform the duties of his/her occupation
- Any Occupation (Any Occ) Under this definition, an insured will be considered disabled only if he/she is unable to work in any occupation for which he/she is qualified by education, training, or experience. This is somewhat similar to the definition that the Social Security Administration uses in determining disability.
The physical or mental inability of individual's to perform major occupational duties because of illness or injury.
A type of insurance used to replace some portion of income in the event the insured cannot work due to illness or injury.
A stated amount of time, in which a policyholder may pay a premium after the due date while keeping the full policy in-force.
A policy offered to employees of a company or members of a union.
An insurance policy provision that prevents the insurance company form cancelling or making changes to a policy for a stated period of time during which the policy is in-force. Policy premiums may increase, however.
A provision that encourages disabled employees to participate in rehabilitation efforts whenever appropriate. Such a provision allows for termination of benefits if the employee refuses to cooperate or participate with a rehabilitation plan.
Maximum Monthly Benefit
The highest dollar amount the insured can receive on a monthly basis under a disability plan.
Maximum Benefit Period (Benefit Duration)
The maximum length of time for which benefits are payable under a policy plan as long as the insured remains continuously disabled.
Medical Care Requirement
An insurance company's right to deny benefits for any period in which the insured is not under a physician's care. Companies may require that care be appropriate, according to generally accepted medical standards, and be provided by a physician whose specialty is appropriate for the condition. The requirement may be waived if reasonable proof is presented that a physician's care is no longer necessary.
Minimum Monthly Benefit
The minimum amount paid as a monthly benefit after reductions for other income.
The amount an insurer will pay for each month of total disability after the elimination period.
A policy that cannot be cancelled or changed by the insurance company as long as premiums are paid on time. In addition, premiums on such a policy cannot increase until the insured reaches age 65.
An additional policy benefit offered by the insurance company which may be included at the applicant's request for an additional cost.
Receiving disability benefits in excess of income earned while working.
Own Occupation (Own Occ)
A definition of disability stating that the insured will be considered eligible to receive the policy's full benefit as long as the he/she is unable to perform the standard tasks of his or her regular occupation(s) at the time of disability.
The physical or mental inability of an insured to perform at least some, but not all, standard duties of his or her regular occupation(s).
The total amount of coverage an insurer will allow on an individual after considering total amount of current insurance in-force or for which the insured is considered eligible.
A physical or mental condition which existed prior to the issuance of an insurance policy.
The presumption that the insured is totally disabled, even if still at work, if illness or injury results in the total loss of sight in both eyes, hearing in both ears, speech, or use of any two limbs. The elimination period is waived from the date of loss and total disability benefits are payable during the loss until the end of the benefits period. Ongoing care of a physician may or may not be required.
The calculation of average monthly expenses for the same period during which prior income is based for the purpose of residual disability coverage.
The insured's earnings prior to disability. This may be calculated as average monthly earnings for the last full calendar tax year or as the average of the highest two of three preceding years, or using another measure.
A policy option that provides some benefits when the insured returns to work following a period of disability.
Recurrent Periods of Disability
Depending on the policy, separate periods of disability may be considered one continuous period if each period is due to the same cause(s) and is not separated by a minimal recovery time (usually 6 months).
A benefit to help reimburse the insured for costs incurred while participating in rehabilitation programs for the purpose of returning to his or her occupation(s).
The conditions around which a policy may be kept after it has been allowed to lapse.
Disability insurance that covers a partial disability as defined in the policy.
Salary Continuation Plan
Also called a Qualified Sick Pay Plan, this is a plan offered by a business to continue the salary of specified employees should they become disabled.
Social Insurance Offset / Substitute Rider
An option that pays a benefit if the insured is disabled and not receiving social insurance benefits.
Social Security Disability Insurance (SSDI)
A federal cash benefit that may be available if a person is disabled under the definitions of Social Security and eligible for benefits.
State Disability Benefit Insurance Laws
Laws enacted in California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico that require employers to provide disability benefits for the non-occupational disabilities.
Waiver of Elimination Period
Depending on the policy, the elimination period may be waived if an insured becomes disabled within five years after the end of a period of disability of longer than six months and for which benefits were paid.
Waiver of Premium
A benefit that alleviates the insured from making premium payments after being disabled during the lesser of the elimination period or 90 days. The policy may also refund premiums paid during the first 90 days and eliminate premiums due during the 90 days after recovery.
Benefits mandated by law to compensate employees for losses incurred due to a work-related illness or injury.