Unit 15 Disability Income Insurance Flashcards
(27 cards)
own occupation
inability to perform any or all of the duties of insured’s normal occupation
any occupation
more difficult to qualify. inability to perform the duties o any occupation for which they are reasonably qualified
income replacement
a reduction in income triggers payment
pays a benefit if the loss of income of income is a result of suffering a covered illness or injury
presumptive disability
automatic qualification if conditions are met
loss of, or loss of use of, any two limbs
total and permanent blindness in both eyes
loss of speech
total and permanent loss of hearing in both ears
basic total disability plans
indemnity benefit
elimination/ waiting period (must be disabled for this length of time before benefits begin)
benefit period (length of time benefits will be paid)
waiver of premium
waives further premium payments after an initial waiting period
refunds any premiums paid during the waiting paid (usually 90 days)
additional monthly benefit rider
pays an additional benefit during first 6-12 months
pays even if the insured receives government benefits (workers’ comp or other government programs)
social insurance supplement
pays when social benefits are not being paid
makes up the difference bettween the government benefit and the amount of the rider
pays only during the policy benefit period
occupational
both-job related and non-job related
nonoccupational
only non-job related
partial disability
returns to work in a reduced capacity
usually pays 50% of the total benefit
usually no longer than 3-6 months
residual disability
paid whether the insured is able to work full or part time
benefit based on reduction of income
pays as long as the reduction in income continues
recurrent disability
condition recurs after returning to work
doesn’t have to wait to start receiving benefits
conditions must recur within a certain time frame after returning to work
encourages employees to return to work without fear or losing benefits if the disability continues
cost of living rider (COLA)
increases the benefit while receiving disability
based on the consumer price index
adjustments are usually made every 12 months
future increase option rider (FIO)
allows insured to increase policy benefits
no evidence of insurability required
the insured’s income must have increased
the rate for the additional coverage is based on the insured’s attained age, not the original issue age
relation of earning to insurance
allows insurer to change policy benefit if insured’s income has decreased
portion of the premium will be refunded
accidental death and dismemberment (AD&D)
amount of the rider is the principal sum (100% of the benefit)
paid in the case of accidental death. usually a multiple of the monthly disability benefit
loss of sight in both eyes or loss of two limbs
capital sum (50%) if loss of sight in one eye or loss of one limb
rehabilitation benefit
designed for total disability
helps the insured train for a new occupation
pays as long as the insured is disabled and stays in the program
medical reimbursement
helps pay medical bills for a nondisabling injury
return of premium
refunds a stated percentage of the premium after a stated time
benefits paid are subtracted from the refund amount
exclusions
common exclusions found in disability income policies are losses arising from war or military service, suicide and other self-inflicted injury, non-commercial aviation, commission of a felony, and living overseas
disability underwriting
occupation
benefit limits
policy issuance alternatives (increased premium or impairment rider)
impairment rider is a rider that eliminates coverage for a particular condition that makes the individual uninsurable
group disability
usually a percentage of pay instead of a stated benefit
short term: 6-24 months, very short elimination period if any
long term: 2 years-age 65. elimination period usually the benefit period of STD
business uses of disability
key person
business overhead expense
disability buy-sell
