Disability Defined

There are two definitions that the insured must meet before benefits under a disability income policy are payable. They are “any occupation” or “own occupation”.

The “any occupation” definition of total disability requires the insured to be unable to perform any occupation for which he/she is reasonably suited by reason of education, training or experience to qualify for disability income benefits.

The “own occupation” definition of total disability requires that the insured be unable to work at his/her own occupation as a result of an accident or sickness.

From a policy owner’s point of view, an “own occupation” disability income policy is more advantageous.  It also is more expensive and more difficult to qualify for.  The “any occupation” definition is more restrictive, and the insurer is less likely to pay a benefit if the insured’s disability must prevent him/her from engaging in any reasonably suitable occupation.
 

Types of Disability Defined

Presumptive Disability
This includes blindness, deafness, loss of speech, and loss of two or more limbs.  These conditions automatically qualify the insured for full benefits because of the severity of the conditions it presumes the insured is totally disabled even if he/she is able to work.

Partial Disability
This is the inability of the insured to perform one or more important duties of his/her job or the inability to work at that job on a full-time basis, either of which results in a diminished income.

Partial disability benefits are normally payable only if the policy owner first has been totally disabled.  This benefit is intended to encourage disabled insured’s to get back to work, even on a part-time basis, without fear that they will lose all their disability income benefits.  The amount of benefit payable when a policy covers partial disabilities depends on whether the policy stipulates a flat amount or a residual amount.

 


Personal Disability Income Insurance Get A Quote Now

Could you continue to pay your bills if you were unable to work for any length of time because of illness or injury?  If you were to become disabled, do you know how much money would be coming in each month and from what sources? Many times disability income insurance is forgotten. Unfortunately for some it comes to mind when the sudden loss of income resulting from a disabling
accident or illness leads to serious financial consequences.

Disability income insurance is designed to provide you with income should you become sick or injured and unable to work. It helps protect against family financial catastrophe by giving you an income to meet daily expenses.

Disability income insurance comes in two major forms: 1) employer-paid and government sponsored programs, generally cost-free to the recipient, covering certain categories of workers; 2) private policies (paid for by individuals) that protect income when there are no applicable employer or government programs or when those programs do not adequately meet income needs.

Personal Disability Income Insurance is designed to provide benefits for those who have no disability insurance through an employer or who are not adequately covered by an employer group or government program. And, chances are that if you’re injured or too sick to work, you are living on less and contributing little or nothing to your retirement fund. So disability income insurance can also help protect your retirement plan contributions, as well as those made by your employer during your disability.

The benefits paid under a disability income policy are in the form of monthly income payments.  Unlike life insurance policies, disability income insurance has a benefit ceiling. Disability income benefits are based on the insured’s earnings and are designed to replace lost income.

Insurers use two methods to determine the amount of benefits payable under their disability income policies.  The method most commonly used in individual plans to establish disability benefits is the flat amount method. Under this approach, the policy specifies a flat income benefit amount that will be paid if the insured becomes totally disabled. Normally, this amount is payable regardless of any other income benefits the insured may receive.

It is important to fully understand the policy’s definition of “disability”. Some policies have a very strict definition that will not pay for many types of disability.

  

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