Disability Insurance Update

Life-Related Types of Insurance

The term "Life-Related Insurance" is used to describe coverages that insure personal well being versus material objects such as homes and autos.  Disability insurance, life insurance, and long term care insurance are three examples of life-related coverages. Additional such coverages are explained below.

Accident Insurance

A type of supplemental insurance used to fill gaps left by other policies.  Benefits may generally be used to cover expenses health insurance does not such as transportation costs, over-the-counter medications and child care.

Accidental Death and Dismemberment Insurance

A policy that provides benefits in the event the insured dies or loses one or more bodily member (such as hands or feet) or the sight of one or both eyes as a result of an accident.

Cancer Insurance

A type of supplemental health insurance that provides benefits in addition to other medical or disability insurance for expenses directly related to the treatment of cancer.

Creditors' Disability Insurance

Insurance that provides for the payment of loan installments while the insured is unable to work due to illness or injury.

Critical Illness Insurance

A policy that pays a living benefit lump-sum cash payment in the event the insured is a victim of one or more specified critical illnesses or events.

Disability Insurance

A type of insurance that pays a portion of the insured’s income if the insured is unable to work due to an illness or injury.  Less commonly referred to as Disability Income Insurance or Income Insurance.

A person in the U.S. has a greater risk of disability than death at every age between 20 and 65. (American Society of Actuaries)

Policies are commonly classified into short term (90-180 benefit days) and long term.  Types of disability insurance include Group (provided by an employer), Private (stand alone coverage paid for by the insured) and Supplemental (coveraged in addition to group paid for by the insured).

Extended Health Care Insurance

A type of health coverage that provides protection for hospital and medical expenses not generally covered by standard health insurance or government programs such as prescription drugs, medical devices, ambulance, private nursing, etc.  Also commonly referred to as "major medical insurance".

Group Disability Insurance

Disability coverage provided by an employer to employees.

Group Health Insurance

Health coverage provided by an employer to employees.

Health Insurance

Insurance providing for the payment of benefits as a result of medical care needed due to illness or injury.  May cover medical treatment expenses such as costs incurred for medical professionals, hospitals, medical supplies, doctor's visits, xrays, pharmaceuticals, etc.

Heart / Stroke Insurance

A type of supplemental health insurance that provides benefits for expenses incurred due to heart or stroke-related incidents not covered by standard health insurance.

Life Insurance

Insurance providing for the payment of benefits upon the death of the life.  Types include Term and Whole Life.

Long Term Care Insurance

An insurance policy that provides benefits to cover some portion of the the cost of in-home and/or facility-based care in the event the insured becomes unable to care for him/herself because of a illness, injury, or cognitive impairment, such as Alzheimer's disease.

Major Medical Insurance

A type of health coverage that provides protection for hospital and medical expenses not generally covered by standard health insurance or government programs such as prescription drugs, medical devices, ambulance, private nursing, etc.  Also commonly referred to as "extended health care insurance".

Medicare Supplement

Also referred to as "Medigap", this is a private supplemental health insurance plan available to Medicare beneficiaries that provides coverage for medical expenses that are totally or partially excluded by Medicare.

Every year, 12% of the adult U.S. population suffers a long-term disability. (National Association of Insurance Commissioners)

Medigap

Also referred to as "Medicare Supplement", this is a private supplemental health insurance plan available to Medicare beneficiaries that provides coverage for medical expenses that are totally or partially excluded by Medicare.

Mortgage Insurance

Insurance that provides for home mortgage payments while the insured is unable to work due to illness or injury.

Private Disability Insurance

A stand-alone type of disability insurance (i.e., not in conjunction with a group disability insurance policy) for which premiums are paid completely by the insured (i.e., not via an employer).

Supplemental Disability Insurance

A type of disability insurance that is purchased in addition to group disability insurance, the purpose of which is to provide additional benefits not available in the group policy.

Term Life Insurance

Temporary life insurance (10 years, 20 years, etc.) payable upon the death of the insured provided that death occurs during the time when when the policy is in-force.

Whole Life Insurance

Permanent life insurance payable on the death of the insured whenever that occurs.  Premiums are typically fixed under the contract and payable until the death of the insured or for a specified number of years.

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