Disability Insurance Articles
Using A Glossary To Read Your Disability Insurance Quote
2010-12-02
When you receive a disability insurance quote, there may be terms in the quote that you aren't familiar with. An insurance glossary can be helpful in deciphering the quote. Most of the terms that are used regarding disability insurance are similar. Here is a glossary of basic disability insurance terms.
Benefit Percentage. The amount of the disability payment is calculated as a percentage of the employee's income before the disability. There is a maximum benefit amount.
Conversion Privilege. If the policy includes this term then it allows an employee who is ending his employment to pay the premiums in order to continue the coverage without having to go through an evidence of insurability.
Definition of Total Disability. This definition will determine if the policyholder is eligible to receive disability benefits. Under an "own occupation" definition the insured person is disabled if they cannot perform the duties of their own particular occupation. Under the definition of "any occupation" the insured is not disabled unless they cannot work in occupation.
Evidence of Insurability. This is when the applicant must give the insurer medical information or financial records to prove that they are insurable.
Indexing. Indexing is increasing the benefits of the policy to account for inflation. After an insured person has received benefits for a year their benefits may be increased to keep up with cost of inflation.
"Mandatory" Rehabilitation. If the disability policy contains this provision then the insurer may require the disabled employee to participate in rehabilitation to speed their recovery. Refusing to go to rehabilitation can be cause for terminating the disability benefits.
Qualifying/Elimination Period. This is amount of time from the date the insured person becomes disabled until the date disability payments begin.
Recurrent Disability. This provision of the policy allows the employee to return to work but if they find they cannot work due to the same disability they will not have to go through another waiting period for benefits to begin.
Survivor Benefit. This benefit is a certain amount of money that will be paid to the insured's beneficiaries if he should die while he is receiving disability benefits. Some policies do not have this provision.
Waiver of Premium. When the insured is disabled and receiving benefits they do not have to pay any disability insurance premiums.
Workplace Modification or Accommodation. When an employee returns to work he may need some type of modification of this work environment to accommodate this disability. This benefit reimburses the employer for a certain amount of these expenses.
Understanding the basic disability terms in this insurance glossary can help you to examine your disability insurance quote and choose the right one for your situation.