Browse and buy affordable health insurance plans here. Compare FREE quotes from major medical insurance companies on our list!
The APS is a report written by the insured's doctor that documents his or her past and current health history. Insurance companies use this report to review applications for insurance and/or to evaluate benefit eligibility, in the event of a claim.
This policy provision increases the policy benefit on an annual basis without evidence of medical or financial insurability. This provision helps the benefit level keep pace with the rising cost of living.
A beneficiary is a person or entity who is named to receive proceeds or benefits from an insurance policy. There are three types of beneficiaries. Primary beneficiaries (such as a spouse) are first entitled to the proceeds. Secondary beneficiaries (such as a child) are entitled to the proceeds if the primary is no longer living when the insured dies. And, tertiary beneficiaries (such as a grandchild) receive the proceeds if both the primary and the secondary beneficiaries are no longer alive when the insured dies.
A benefit period is the maximum amount of time the insured may receive proceeds for a continuous disability. The benefit period is subject to underwriting requirements. The insured may select a benefit period of two years, five years or up to retirement age of 66 or 67.
A benefit percentage is the amount payable to the insured, based on a percentage of the insured's income prior to disability. The proceeds are limited to an overall maximum amount.
This type of policy reimburses business owners for covered business-related expenses that are incurred during their period of disability.
A buy-sell policy pays a lump sum or installments to the insured's corporation or business partner to buy out the business interest of the disabled owner.
Used in Business Overhead Expense policies, this account accumulates unused benefits so they carry-over and can be used by the insured later.
To collect benefits for a partial disability under the residual provision, the insured must show proof of loss of earnings. The insured can choose one of two accounting methods to determine monthly earnings - either cash or accrual. The same method must be used at all times for any one disability.
If a policy contains a cash value rider, it builds cash value. The cash value typically reaches 100 percent at age 65.
The commencement date is the first day a disability is covered. It immediately follows the completion of the waiting period.
A concurrent disability occurs when there is more than one injury or illness. Though there is more than one factor causing disability, the concurrent disability benefits are paid as if there is only one injury or illness. The insured will be considered to have one disability. Once a continuous period of disability begins, it remains one period, no matter what or how many injuries or illnesses caused the start or continuation of disability.
If a policy owner pays a premium at the time of insurance application, she will receive a conditional receipt. With this receipt, the insured receives interim coverage during the underwriting process. This is subject to the terms and conditions of the receipt.
This policy provision indicates that the insurance company will renew the insurance policy if the insured complies with certain stated conditions.
A continuous disability occurs when recurrent periods of disability stem from the same cause and are separated by less than 12 months of recovery.
A conversion privilege allows employees who are leaving a job to keep some or all of their LTD coverage without having to submit evidence of insurability. This is done at the employee's expense. It also allows Business Overhead Expense policyholders to convert to individual DI policies if and when their needs change.
A disability caused by cosmetic surgery or transplant surgery is considered the same as a total disability due to illness, after six months of coverage.
A cost of living rider increases the disability benefit each year according to a percentage derived from the Consumer Price Index measure.
This is a list of expenses that are covered and reimbursable during an insured's period of disability.
Used in circumstances when there are two business owners, this agreement allows owners to be both the owners and the beneficiaries of a buy-sell policy.
To encourage a return to the workforce, most disability insurance carriers offer limited benefits to those who return to work part time or full time (with a loss of earnings). If the insured can work in a limited capacity and is earning less than a set level of income, he is eligible for limited benefits.
This important provision in a disability contract defines the parameters used to determine if an employee is eligible for benefits. There are several levels to this definition.
Disability benefits are any proceeds the insured receives for a disability covered in the policy provisions.
The monthly benefit received by the insured to help replace lost earnings during his or her period of disability.
Disability insurance is a type of health insurance which pays the insured a monthly benefit, replacing earnings lost from an accident or sickness.
State laws and insurance policies say the insured's education, training and experience must be taken into consideration when determining if there is a disability from "any occupation." Continuation of benefits may be denied if it is determined the insured can work in a different occupation that is comparable to the job held prior to injury or illness.
To make the analysis, two criteria are considered.
The effective date is the day the policy begins.
Also referred to as the qualifying period, the elimination period is the time during which an employee must be disabled before benefits will begin.
Similar to a cross-sell agreement, this agreement designates the corporation as both the owner and the beneficiary of buy-sell policy proceeds.
Disability policies include specific conditions in which a disability will not be covered. For example, many plans will not provide benefits for disabilities arising from being in a war, participating in a riot, committing a felony, or self-inflicting an injury.
This document is attached to the disability policy and outlines the specific conditions that will not be covered under the policy. Excluded conditions often include preexisting conditions identified by medical history or physical exam.
A payment arrangement that allows the insured to pay his or her disability premium using a salary bonus that can be deducted under Section 162 of Internal Revenue Code.
A method of evaluating earnings and other financial data to determine an insured's appropriate monthly benefit.
The future purchase option rider allows the insured to buy additional monthly benefits on specific option dates. This is regardless of the insured's health, as long as the earned income at the time justifies the increase of benefits.
A grace period is the 31 days immediately following the due date of a premium. The policy will continue during the 31 days, but if the premium is not paid by the end of the grace period, all coverage will be terminated.
A policy option that allows the insured to increase the monthly benefit at specified dates. Only a review of financial insurability is required.
If premiums are paid by the end of each grace period, no changes can be made to any part of the policy, except the price of the premium. After three years, the premium price can change, but only if the change applies to all policies with the same benefits insuring the same risk class.
This rider is designed to provide the insured protection against inflation. It pays an additional monthly benefit, which is tied to the Consumer Price Index. After the first year of disability, the insured's pre-disability earnings are increased (or indexed) by a percentage. This additional benefit is recalculated on an annual basis.
An injury is any accidental bodily injury sustained by the insured after the policy effective date and while the policy is in force.
Insurance company ratings can provide information on the companies' financial performance, stability claims paying ability and more. There are five major insurance industry ratings services: A.M. Best, Standard and Poor's, Moody's, Duff and Phelps, and Weiss. Their top ratings are:
A report ordered by the underwriter that summarizes an applicant's health history, employment and habits. This information is obtained by interviewing the applicant directly and by interviewing his/her personal and professional associates.
This buy-sell policy provision offers the insured an alternative payout option of monthly installments for a specified period.
This policy reimburses the business for financial loss during a key person's period of disability.
Group disability plans may have specific provisions that limit coverage in certain areas. Only limited benefits are often payable for specific conditions or under certain circumstances (such as mental illness or a pre-existing condition).
Buy-sell policies typically pay the disability benefit in a lump sum.
To encourage disabled employees to participate in rehabilitation programs, some policies include a mandatory rehabilitation provision. This provision states that if an employee refuses to cooperate or participate in a rehabilitation program, benefits will be terminated.
The maximum benefit period is the longest length of time benefits are payable as long as the employee remains continuously disabled.
The maximum monthly benefit is the most a disabled employee can receive on a monthly basis under the LTD plan.
A medical examination and report are often part of the application process for disability insurance policies. The information becomes part of the contract and is attached to the policy.
A method of evaluating an applicant's health and medical history to determine if a policy will be issued and if so, the appropriate rates and exclusions.
Group policy benefits are limited when a disability is caused by a psychological, behavioral or emotional disorder; by alcoholism; or by the non-medical use of narcotics or sedatives. Benefits are usually limited to 12 to 24 months unless the insured is confined to a hospital. Individual disability policies generally do not have this limitation.
Any disability caused by or related to a mental or nervous disorder is often limited in coverage by long-term disability insurance policies. Contracts include a definition of mental and nervous disorders and the insured must meet that definition in order to receive benefits. A major gray area, there are many interpretations and opinions of the terms.
Typically, there is a minimum amount paid as a monthly benefit after reductions are taken for other income benefits.
Under the residual disability provision, the minimal residual benefit provision typically stipulates that during the first six months of disability, the insured must be paid at least 50 percent of the total disability benefit.
This figure is used in financial underwriting to determine an appropriate benefit amount. It includes the total non-business related assets of an insured.
A non-cancelable rider changes a policy and all riders from a guaranteed renewable status to a non-cancelable and guaranteed renewable status. With this rider, the insurer cannot change the policy or its premiums as long as all premiums are paid by the end of each grace period.
An underwriting category in which insureds are placed based on their specific, customary job duties.
Optional benefits are usually available in the form of riders. They add additional coverage to the basic policy.
An insured, while disabled, may receive benefits from other sources, such as Social Security, workers' compensation or disability benefits received from other employer-sponsored plans. However, benefits payable under a group LTD plan may be reduced by other sources of income.
Insurance companies usually provide policyholders with an outline of coverage that summarizes the benefits provided.
In Business Overhead Expense policies, the Overhead indicates the maximum benefit payout. It is calculated by multiplying the monthly benefit by the number of months in the benefit period.
Own Occupation is the most generous and preferred policy definition available. It defines disability as the insured's ability to perform the duties of his or her own occupation.
This policy provision or rider pays a specified benefit percentage if the policyholder is unable to perform one or more duties of his own occupation.
This optional policy benefit reimburses a company for the expense of recruiting a replacement for a disabled key person.
This policy provision requires the insured to be under the regular care of his or her attending physician as an eligibility requirement.
This page within the policy outlines all policy data such as the policy number, benefit amount and premium.
Pre-disability earnings are the employee's salary that is covered by the plan on the day before the disability began
Pre-existing conditions are often defined in long-term disability policies. Pre-existing conditions are often defined as any mental or physical condition for which:
If the insured, during a specified period of time (often three months) prior to coverage, received medical attention for the same reason as a claimed disability that began after the policy's effective date of coverage, the disability will not be covered. Some policies have more restrictions that state if the insured did not seek medical attention for the condition but still experienced the symptoms prior to coverage, the disability may be excluded from benefits.
A pre-existing condition is a physical or mental condition that existed before the effective date of the insurance coverage. Most policies exclude or reduce benefits for pre-existing conditions.
A preferred risk class is a group of individuals who have a lower anticipated mortality or morbidity rate (based on health, family medical history and occupation) than those in the standard risk class.
A premium is the periodic payment required to keep an insurance policy in effect.
The premium payment frequency selected by the insured. My insurance companies offer annual, semi-annual, quarterly or monthly payment modes.
The grounds for presumptive total disability, a total and permanent loss because of injury or illness, can be defined as one of the following:
A method for determining how much disability coverage is needed by an individual.
The qualification period is the number of days that the insured must be totally disabled before he/she becomes eligible for residual benefits.
This provision protects employees who return to work, but become disabled again from the same or a related cause. If this situation occurs within a certain period of time, the insured is considered still disabled from the original disability and is not subject to a new elimination period. The recurrent disability provision encourages employees to return to work without the fear of losing benefits if the disability continues.
Rehabilitation is a program of clinical and vocational services that aids in the restoration or improvement of the insured's health and functionality. The goal of rehabilitation is the return of a disabled employee to work and health.
The term regular occupation refers to the insured's job at the time the disability began.
The rehabilitation benefit is an added benefit for those who join a vocational rehabilitation program approved by the insurer. While still receiving total disability benefits for up to 36 months, the rehabilitation benefit will pay any reasonable costs of the program that are not covered by other plans, policies or programs.
This term means that income from all sources including insurance cannot exceed 100 percent of the insured's pre-disability earnings.
This provision determines the terms of renewal. Common examples include conditionally renewable, guaranteed renewable or non-cancelable.
If the insured is residually disabled, but not totally disabled, the residual disability rider provides a reduced basic monthly benefit.
This benefit refunds a percentage of the premium less the amount paid in claims at specified intervals during the life of the policy.
An additional incentive is usually provided for a period of time to encourage disabled employees to return to work. This is called a return to work provision. The insured can receive up to 100 percent of pre-disability earnings, based on a combination of disability benefits and return-to-work earnings, under this provision.
A rider is any extra agreement that is part of the policy that expands or limits the policy's conditions, coverage or benefits.
Also called a Section 105 plan, this allows the employer to make full or partial deductible wage payments to a disabled employee.
Many policies have a provision limiting coverage (often two years) for disability benefits due to an illness or injury that is based on self-reported symptoms. These are disabilities that cannot be verified by medical testing. Common examples include headaches, pain, fatigue, stiffness, soreness, ringing in the ears, dizziness and numbness. Some states have found that Fibromyalgia and Chronic Fatigue Syndrome may not be included in such provisions.
This provision covers both physical and mental illness or disease that is diagnosed following the policy effective date.
This provision allows the insured to collect the full disability benefit if he/she returns to work and suffers a significant loss of income as defined by the policy.
Policy applicants who use tobacco produces are subject to a higher premium rate, called a smoker rating. Those who do not smoke or use tobacco products are given a lower premium rate. If an applicant smoked in the past, but has quit more than a year ago, most insurers will still consider the applicant as a nonsmoker. Nicotine can be detected in routine screening tests commonly required by most insurance companies.
This optional benefit coordinates insurance benefits with Social Security disability benefits to avoid under- or over-payment.
The standard risk class is the group whose mortality and morbidity rate is thought of as average. Most insured are included in this class.
This optional business overhead policy benefit reimburses for the business expense of paying a replacement worker during insured's period of disability.
This form provides the underwriter with additional details about the applicant's health.
The supplemental social insurance rider is a monthly benefit. For those receiving a benefit for total disability, this rider pays for additional benefits, less any legislated benefits (like Social Security or workers' compensation) for the same time period. The payment is in addition to other benefits payable under the insurance policy.
The survivor benefit is an amount payable to the insured, the insured's estate or the insured's designee, if the insured dies while receiving total disability benefits. The survivor benefit is a lump sum payment that provides benefits to the insured's eligible survivors. This is an optional benefit for most policies.
The term of policy/policy renewability is the time period for which a policy is in force. Disability insurance is typically renewable annually until the insured reaches retirement age. Some policies continue after retirement as long as the insured continues to work and pays the required premiums.
An employee qualifies as totally disabled if, due to illness or injury, he is unable to perform the substantial and material duties of his occupation; is not engaged in any other occupation; and is under the care of a physician for the illness of injury.
This rider changes the definition of total disability by allowing the insured to work another job while still totally disabled from the regular occupation.
The underwriter is a company that receives premiums and accepts responsibility for fulfilling policy contracts. The company employee who decides what risks the company should assume is also called an underwriter.
Unearned income continues regardless of whether an individual is working. Examples include interest or dividend income.
An uninsurable risk is someone who is not accepted for insurance due to excessive risk of loss.
As long as benefits are being paid out, no further disability premium payments are required from individuals who become disabled and qualify for benefits. The waiver of premium is typically issued after the insured has been continuously disabled for a specified period of time.
A state-administered program that provides benefits to workers who are injured during the course and scope of employment.
The workplace modification or accommodation benefit assists an employer when a disabled employee requires special needs or equipment in order to return to work. The employer is reimbursed up to a set amount.
In the 1st year following a paraplegia, living expenses average $259,531 per person (Source: National SCI Statistical Center, 2005)
Workers today are 3 times more likely to suffer a long-term disability than die during their working years (Source: The Council of Disability Insurers, The Long Term Disability Claims Review: 2005)