Disability Insurance

1
Disability Insurance

• Elements of a Policy

2
How much?

• How much does a disability policy pay?
• 40 -60 of salary at the time you became
  disabled
• Comprehensive policies can add cost of living
  adjustments

3
How soon?

• Once you become disabled how soon will benefits
  start?
• Choice of 30, 60, 90, or 120 days
• Shorter the time to wait on payments, higher the
  premiums
• Time from disability to payment is called
  elimination period
• To determine appropriate elimination period,
  decide what other funds may be available

4
How long?

• 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

5
Defining Disability

• Policy definition of disability important
• Total disability inability to perform the
  duties of ones 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

6
Defining Disability

• Partial Disability
• Disability 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

7
Defining Disability

• Residual Disability
• Same as partial disability
• Must suffer at least a 20 loss in income
• May or may not be covered under a policy

8
Defining Disability

• Presumptive disability
• Specific definition of total disability
• Results 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

9
Disability Insurance Summary

• In considering a disability insurance policy you
  must consider
• How much?
• How soon?
• How long?
• The policys definition of disability