Disability Insurance Terms

A helpful list of terms you should know when reading a disability insurance policy's outline of coverage.

• Active, Full-time Employee: An employee that works on a regular basis for a minimum number of hours is considered eligible for coverage.
• Any Occupation (Any Occ): A person eligible for benefits must be unable to perform any occupation for which they have qualifications for.
• Benefit Percentage: The percentage of your income paid out in benefits.
• Cost of living adjustment (COLA): A type of inflation protection that increases your disability benefits based on the Consumer Price Index. This provision will result in a higher premium.
• Definition of Total Disability: Your benefits will only begin when you meet the contract's definition of total disability, so it is important to know exactly how your policy defines disability.
• Exclusions: Situations not covered by a disability policy. Common exclusions are war, taking part in a riot, committing a crime and self-inflicted injury.
• Indexing: To protect against inflation, benefits are increased by a specific percentage, usually annually.
• Own Occupation (Own Occ): A person eligible for benefits must be unable to perform his/her own occupation.

Sources

1. Disability Insurance Terms. Retrieved April 25, 2008, from http://www.disabilitylawyers.com/Glossary-Disability-Terms1.cfm
2. How can I insure against loss of income? Retrieved April 25, 2008, from http://www.iii.org/individuals/disability/lossofincome/