XCEL CH. 13

Partial Disability

A disability from an illness or injury that prevents an insured person from performing one or more of the functions, but not all of his or her regular job. Also the inability to work full time, either which results in a decrease of income

Delayed disability provision

A disability income policy provision that allows a certain amount of time after an accident for a disability to result, and the insured remains eligible for benefits. Most policies allow a certain amount of time during which the recurrence of a disability is considered a continuation of the prior disability. During that time period the insurer will then pay benefits without a new elimination period. If the Recurrence takes place after that period it is considered a new disability meaning it will be subject to a new elimination period.

Nondisabling Injury

An injury which may require medical care, but does not result in loss of working time or income.

Change of Occupation provision

If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.

Nonoccupational Coverage

The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured's employment

Benefit Period

The maximum period of time for which benefits will be paid under a disability income or other insurance policy. Instead of charging additional premiums or excluding coverage when issuing a disability income policy to a substandard risk, an insurer may shorten the benefit period.

Elimination Period

a duration of time between the beginning of the insureds disability and the commencement if the period for which benefits are payable. Often considered the deductible for a disability policy and is directly correlated to the premiums of the policy. If an insured wants a lower premium, they will need to settle for a longer elimination period. Shorter periods will result in higher premiums

Cost of Living Adjustment Rider (COLA)

a rider available with some policies that provides for an automatic increase in benefits (typically tied to the consumer price index), offsetting the effects of inflation

Percent of Earnings Approach

determines the benefit using a percentage of the insured's pre-disability earnings and takes into account other sources of disability income

Rehabilitation Benefit

facilitates vocational training to prepare insured for a new occupation. With some disabilities, insureds may not be able to return to their normal occupation but still be able to work at some kind of job. Under this the insurer will pay the approved cost of a rehabilitation program to help the disabled return to work

Presumptive Disability

if an insured experiences a specified disability, such as blindness, the insured is presumed to be totally disabled and entitled to the full amount payable under policy, whether or not the insured is able to work. *Includes total blindness, total deafness, loss of speech, and loss of two or more limbs

Residual Amount Benefit

is a disability income payment based on the proportion of income actually lost due to partial disability, taking into account the fact that the insured is able to work and earn some income

Own-occupation policy

is total disability that requires that in order to receive disability income benefits the insured must be unable to work at the insured's own occupation

Guarenteed Insurability Rider (GIR)

protects the insureds right to buy more coverage in the future without the need to prove good health (evidence of insurability)

Social Security Rider

provides for the payment of additional income when the insured is eligible for social insurance benefits but those benefits have not yet begun, have been denied, or have begun in an amount less than the benefit amount of the rider.

Waiver of Premium Rider

should the owner be disabled and cant earn an income, after 6 months, all premiums will be paid by the insurer during the disability period; After 6 months, the premiums will be repaid. The disability must be total and permanent. After a certain age (usually 60 or 65), the waiver of premium rider becomes void. NOT A LOAN

Flat Amount Approach

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. This amount is usually 50% of the full disability benefit

Any occupation disability

total disability that requires that for disability income benefits to be payable, the insured must be unable to perform any job for which the insured is "Reasonably suited by reason of education, training, or experience".

Elective Indemnity

• Some short-term disability income policies provide for an optional lump- sum payment for certain named injuries • The insured may sometimes select this elective indemnity option when applying for a disability policy