Disability Insurance Terms

Base Benefit: The Base benefit is the amount of monthly benefit you will receive from your Disability insurance policy once you have satisfied the elimination period. The Base benefit is paid regardless of any Social Security benefits you receive.

Benefit Period: The longest period of time for which an insurance company will continue to pay benefits on a continuous disability. Most carriers offer benefit periods of: 2–years, 5–years, 10–years, to age 65, or to age 70.

Definition of Disability: A description of the circumstances in which a person is eligible for a disability claim.

Elimination Period: The period of time which must elapse prior to benefits being paid. Most carriers offer elimination periods of: 60–days, 90–days, 180–days, 365–days, and 730–days. The 90–day option is normally the most cost effective option.

Exclusion: A specific injury or sickness that the insurance company excludes from being covered in the contract. Exclusions are mostly used for pre-existing conditions. If an exclusion is added to your policy you will be notified and required to sign an amendment if you decide to accept the policy.

General Exclusions: Most companies will not pay benefits for a disability that is caused due to: an act of war; regular pregnancy or childbirth but complications are covered; any noted exclusion; you committing or attempting to comit a felony; an intentionally self inflicted injury.

Guaranteed Renewable: After age 65, you have the privilege of renewing your policy with a limited benefit period, as long as you remain gainfully employed and are working at least 30 hours per week. Premium rates are subject to change.

Non–Cancelable: The insurance company cannot cancel your policy, increase premiums or change any policy provisions until you reach age 65, assuming that you continue to pay premiums on time.

Presumptive Disability: An insurance company will consider you totally disabled if due to injury or sickness you suffer total loss of sight in both eyes, hearing in both ears, speech or the use of both feet, both hands or one foot and one hand in their entirety. Benefits will be paid benefits for the entire benefit period and with some companies, benefits will be paid regardless of whether you are gainfully employed.

Recurrent Disability: If after returning to work from a total disability, in which benefits were paid, you become disabled again within a specific number of months, the insurance company will consider the later disability to be a continuation of the first disability, unless the later disability is caused by a completely different injury or sickness. This will prevent you from having to satisfy the elimination period again.

Social Insurance Offset Benefit: This is an additional benefit amount you can add to your Disability insurance policy at a lower cost than the “Base” benefit. This benefit will be paid in addition to the Base benefit your policy provides. However, this benefit will offset with any Social Security or Worker’s Compensation benefits you receive.

Waiver of Premium: Insurance companies will waive any premiums due while you are disabled and receiving benefits, and will refund premiums paid during the elimination period. Some companies will also waive premiums for a few months after you recover.

If anything is unclear or if you would like clarification of any specific Disability Term, please call 1-800-817-4522 or Contact us.

NOTE: Since the purpose of these descriptions is to be educational, the terminology used is not the exact terminology used in an actual Disability insurance contract. Every disability insurance contract is different from the next. These explanations are solely intended to help you understand the provisions used. Not all provisions and definitions will be available with every insurance carrier, and even when they are, not all applicants will be eligible. Prior to purchasing Disability insurance, it is very important for you to review the exact wording used by each company with a specialist.