Elements of a Policy

How much does a disability policy pay?40% -60% of salary at the time you became

disabledComprehensive policies can add cost of

living adjustments

Once you become disabled how soon will benefits start?Choice of 30, 60, 90, or 120 daysShorter the time to wait on payments,

higher the premiumsTime from disability to payment is called

elimination periodTo determine appropriate elimination period, decide what other funds may be

available

How long will disability payments continue?Policy may cover a specific number of years

3 to 5 Coverage to age 65 for additional cost Most individuals retire at 65, no longer

dependent on working income

Policy definition of “disability” importantTotal disability – inability to perform the

duties of one’s occupation Total temporary disability – current disability is

total, but you should recover at some point in the future

Total permanent disability – disability is total and permanent, and you will receive payments for the total period

Partial DisabilityDisability that prevents you from

performing one or more of the activities required by your job

May or may not be eligible for benefits depending on the policy

Could be classified as either temporarily partially disabled or permanently partially disabled

Residual DisabilitySame as partial disabilityMust suffer at least a 20% loss in incomeMay or may not be covered under a policy

Presumptive disabilitySpecific definition of total disabilityResults from

Loss of sight Loss of speech Loss of hearing Loss of use of two or more limbs

Under this designation you are “presumed” to be totally permanently disabled

May qualify for disability retirement

In considering a disability insurance policy you must consider

How much?How soon? How long?The policy’s definition of disability