Disability insurance Guide: Everything You Need to Know
Definition: Disability insurance pays out a monthly income in the event of a disability. This amounts to 60 percent of your annual income, but it’s tax free, so it’s practically the same as your take home money.
Why Disability Insurance?
Could you live without your paycheck? What would happen to your lifestyle if you became disabled? If you’re like most people, you have maybe 3 to 6 months’ worth of savings to carry yourself financially. What happens when that runs out? Do you have any investments? If not, prepare yourself for eviction notices, ruined credit, bankruptcy, moving back in with your parents (Gasp!). That’s the best-case scenario. Worst case, you don’t have any family to move in with, and what would become of your kids? You can see where this is going. The chances of having your life completely ruined are just too high to gamble with.
What are the chances of disability?
Most people, especially young people, think that they are immune to disability or that it isn’t very common. These are the same group that have the least amount of money saved up to float themselves through the disability. Just over 1 in 4 of today’s 20-year-olds will become disabled before they reach retirement age, according to the Social Security Administration. Consider the lifestyle of the average younger person. All the exercising, sports playing, and general fun that can get people hurt. A simple basketball game could take you out for the count if you roll your ankle. Yet and still, around 90 percent of disabilities are caused by illness or back problems.
Let’s Say You Have Savings…
I suppose you could try to tap that 401k, IRA, or mutual fund, but you’ll be paying taxes at likely the highest tax rate, and if you’re under 59 and half, add the 10 percent penalty on top of that. Isn’t that your retirement fund anyway? You could certainly use your retirement fund to cover the times that you can’t work, but you’ll end up relying on social security in your older years, if it is still around. What was the point of saving for retirement? You realize that disability insurance only costs 2 percent of your annual income to pay you the equivalent? Not to mention with certain disabilities, you can still work while receiving the disability payments. We don’t even have to do the math on this one. It’s clearly evident that it’s not a good idea to use any of your savings to pay for the times that you are disabled.
So what are your options?
I’m sure by now you feel that you still have a few options outside of private disability insurance, so let’s go over them.
You can’t rely on social security disability.
If you’re thinking social security disability will save you, think again. For starters, it more than likely won’t pay enough to cover all of your bills. The average benefit amount pays around $1,000 monthly. You can’t even qualify for disability insurance if all you make is $1200 a month. Secondly, chances are you won’t even qualify for it. 70 percent of first time disability claims are denied, after a 6 month approval process. You can always file an appeal, but then you have to wait even longer, likely not be approved, all the while your credit is being ruined, savings being depleted, eviction notices piling up, well you get the picture.
Workplace Coverage Isn’t Enough
In fact, over 70 percent of private sector workers don’t have long term disability insurance. The small percentage of group disability policies out there mainly cover short term disabilities. That’s fine, I mean, it better than nothing, but short term disability can only cover you up to 2 years, and usually only 3 – 6 months. You’re also probably going to pay taxes on your monthly benefit, because group di coverage is usually tax-deductible for the employer. Group DI is also rarely portable, so if you leave your job, the coverage ends, and your next employer most likely won’t offer it. This is all if you even qualify, because disability definitions aren’t very strong, so you might not even be able to collect in your time of need.
You Can’t Rely on Workman’s Comp.
Only 5 percent of disabilities are workplace related. Workman’s Compensation is only for disabilities that occur while on the job, and only as a direct result of a defined hazard in the workplace, or something that is completely the fault of the employer. Add in the fact that over 90 percent of disabilities are due to illnesses, NOT accidents, and it’s very unlikely that you’ll ever get a penny out of workman’s comp.
Elimination periods (30, 90, 180, and 365 days.)
An elimination period is the time it takes in days after your disability claim is approved before your monthly payments starts. This period can range from 30 days to a year. As you might’ve guessed, the longer the elimination period, the cheaper your premium payment. The best way to select your elimination period is to consider what your budget will allow for premium, savings you can live on during that time, and generally how long your willing to wait.
Don’t wait too long
The disability insurance approval process is similar to life insurance, but slightly stricter. Chances of being approved are much higher when healthy. It is also doesn’t get any cheaper as you age, so if you need it, and 99% of us do, get It now.
Disability Periods
Disability periods vary, and generally the longer the disability period selected, the more expensive the policy. Disability periods range from 2 years, 5 years, 10 years, and to age 67. It’s recommended to buy at least a 10 year policy, but one must consider what their budget will allow.
Conclusion
Disability insurance is one of the most important insurance protections a person could ever buy. Income protection is the cornerstone of financial wellness. Without protection for your ability to make money, you’re gambling with everything in your life. You’re taking a chance with not only your livelihood, but that of your family’s. Your options without disability insurance are complete financial ruin, moving in with your parents and being treated like a kid again (maybe with good reason), or homelessness if you don’t have family. Of course, you could always just not become disabled. Another option is putting your head in the sand and avoiding reality. You could choose not to get into an accident, and you can choose not to have your house burned down, right? Do yourself a favor and get a disability quote.
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Disability Definitions
It is of the utmost importance to choose a disability insurance policy with good disability definitions. If the disability definition is to ambiguous, it could leave the door open for the insurance company to deny a disability claim. So make certain to pick the right carrier with good definitions. Bluecrushinsurance.com is independently licensed and have we the ability to work with a multitude of carriers. For the moment, we mainly work with Assurity because of the excellent financial rating, good definitions, and overall reliability and reputation. Below you can find the definitions that come with all Standard Century+ DI Assurity disability policies.
Individual Disability Payout
The max monthly payout if you become disabled is usually 60% of your annual income, but it’s tax free, so it mirrors your take-home income.
Total Disability Monthly Benefit (also referred to as Base Policy Monthly Benefit)
If the insured is totally disabled and the elimination period has been satisfied, this benefit will be paid. Benefits will continue while the insured is totally disabled or to the end of the maximum benefit period, whichever is first.
Total disability monthly benefits will be paid for only one of two or more concurrent disabilities. Also, a recurrent total disability is considered a new total disability only if it is separated from the ending date of the prior total disability by a period of one year or more where the insured is continuously employed on a full-time basis and not receiving any disability monthly benefits. A new total disability is subject to a new elimination period and starts a new benefit period. Any other recurrent total disability is considered a continuation of a prior total disability, not subject to a new elimination period or starting a new benefit period. (See Definitions section.)
Partial Disability Monthly Benefit
If the insured is partially disabled and has resumed part-time employment immediately following a period where they received total disability monthly benefits, this benefit will be paid. Benefits will continue until the insured is no longer partially disabled or to the end of the maximum benefit period, whichever is first, but no longer than six months. The partial disability monthly benefit is 50 percent of the base policy monthly benefit.
Presumptive Disability Benefit
If the insured is presumptively disabled, the total disability monthly benefit will be paid regardless of the insured’s ability to work and whether or not they are under the care of a physician. The elimination period does not need to be satisfied for the insured to receive the benefit.
Home Modification Benefit
If the insured is totally disabled and has been receiving total disability monthly benefits for six consecutive months, the actual costs up to six times the base policy monthly benefit during their lifetime will be paid towards modification of their existing residence to accommodate their disability. Modifications must begin while the insured is totally disabled.
Survivor Benefit
If the insured dies while receiving total disability monthly benefits and has been receiving total disability monthly benefits for at least the prior 12 consecutive months, a lump sum of six times the base policy monthly benefit will be paid to the beneficiary(-ies).
Vocational Rehabilitation Benefit
If the insured is totally disabled and has been receiving total disability monthly benefits for six consecutive months, the actual costs of a vocational rehabilitation program may be paid, up to a maximum of six times the base policy monthly benefit during their lifetime. The program must be pre-approved by Assurity and provide instruction or training at an accredited college, university or vocational school that contributes to the insured’s return to work. Participation is voluntary and may be at the insured’s request or as suggested by Assurity.
Organ Donor Benefit
If the insured becomes disabled as the result of surgery for transplanting an organ or donating bone marrow, Assurity will pay policy and rider benefits on the same basis as any other sickness.
For benefits to be paid, the elimination period must be satisfied and the donation must occur after this policy has been in force for six months or more from the issue date or last reinstatement date.
Waiver of Premium
Renewal premiums will be waived on the first premium due date after the insured has been totally disabled for the elimination period or 90 days, whichever is shorter. Any premiums paid during this period which became due after total disability started will be refunded.
Waiver of premium ends when the insured is no longer receiving disability monthly benefits. Premiums are not waived during a period of partial disability.
Own Occupation
The occupation in which the insured is engaged at the time their disability begins. The insured can collect disability payments even while working in a different position if they can’t perform the substantial and material duties of their original job. This benefit comes standard in Century+ DI Assurity policies and will last 2 years from the elimination end date. To make this benefit last longer, a rider can be added to the policy and the length of time can be selected.
If the insured is unemployed one year or less from the time their disability begins, own occupation will be the occupation in which they were engaged prior to becoming unemployed. If they have been unemployed for more than one year, own occupation will be an occupation which fits them by education, training or experience.
Assurity Century+ DI Add-ons/Riders
Riders add value to the policy, but also increase the price of the premium. It is up to the potential insured to decide what they want and how it fits their budget.
Automatic Benefit Increase Rider
The Automatic Benefit Increase Rider increases the base policy monthly benefit by 5 percent of the original benefit each year for any benefits payable starting after the first year continuous benefits have been paid. Payments will continue to increase each year while payable under the policy until the base policy monthly benefit payment has increased to twice the original amount.
If the insured receives an increased benefit and then recovers, the benefit may be increased permanently with written request to Assurity within 90 days of recovery before attained age 60 and if employed full time. Premiums for the increased benefit will be based on the insured’s attained age and Assurity’s then-current rates.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65, age 67 for to-age-67 benefit period
Issue Limitations: Not available with the 1-year benefit period or for government employees
Catastrophic Disability Benefit Rider
The Catastrophic Disability Benefit Rider provides a monthly benefit if the insured is catastrophically disabled and all base policy monthly benefits have been paid. Benefits will continue and premiums will be waived while the insured is catastrophically disabled or to the end of the catastrophic benefit period, whichever is first.
Catastrophic disability means the insured is totally disabled past the policy benefit period and:
•needs the presence of another person within arm’s reach and/or physical assistance to perform two or more activities of daily living (ADLs), or is cognitively impaired;
•does not work in any job for wage or profit; and
•has had a physician certify their continued total disability and prescribe a plan of treatment.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65
Benefit Amounts: Same as benefit amount selected for policy
Benefit Periods: For each policy benefit period, the following rider benefit periods are available –
•1-year policy benefit period – 4-year and 9-year
•2-year policy benefit period – 3-year, 8-year and to-age-65
•5-year policy benefit period – 5-year and to-age-65
•10-year policy benefit period – to-age-65
Issue Limitations: Not available with to-age-65 and to-age-67 policy benefit periods and the 5-year policy benefit period for issue ages 56 through 60
Critical Illness Benefit Rider
The Critical Illness Benefit Rider will pay a benefit if the insured receives a first-ever diagnosis or has a procedure for one of the specified critical illnesses shown in the following chart. The amount payable is the percentage of the benefit amount found in the chart multiplied by the benefit amount.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65, age 67 for to-age-67 benefit period; conditionally renewable to age 75 if employed full time (same as policy)
Benefit Amounts: $5,000 through $150,000 but not exceeding 36 times the base policy monthly benefit; issue amounts rounded to the lowest $50 increment.
Issue Limitations: Not available with the Return of Premium Benefit Rider. Rider itself can be rated Table 1 (125 percent) or Table 2 (150 percent).
Benefits Payable in the Same Category: If an insured receives a percentage of the benefit amount for one specified critical illness within a category and then becomes eligible for benefits for another specified critical illness within the same category, the benefit amount payable for the subsequent illness within the same category is the lesser of the percentage amount payable or 100 percent minus the percentage of the benefit amount received for all previous specified critical illnesses within the same category.
After 100 percent of the benefit amount shown on the rider schedule has been paid to an insured person within a category in the chart above, Assurity will not pay any additional benefits for any specified critical illness in that category for that insured person.
Benefits Payable in Different Categories: If benefits have been paid for a specified critical illness within one category for an insured person, no benefits will be payable for a subsequent specified critical illness within a different category for that insured person unless the date of diagnosis of the subsequent specified critical illness is separated by at least 180 days from the date of diagnosis of the immediately preceding specified critical illness.
Guaranteed Insurability Rider
The Guaranteed Insurability Rider gives the insured the option to increase their base policy monthly benefit by purchasing additional amounts of insurance. Additional amounts will have the same benefit period and elimination period as the policy. Increases do not require evidence of insurability and are based on the insured’s current income and Assurity’s issue and participation limits in effect on the option date. Premiums for the additional insurance will be based on the insured’s attained age and Assurity’s then-current rates. The insured cannot exercise an option if disabled or receiving disability benefits.
There is no limit on the number of options exercised; however, the sum of all increases cannot exceed the total of the original base policy and SDIR monthly benefits. Increases must be requested in writing to Assurity during the option period – the 60 day period preceding the option date. Option dates are policy anniversaries starting two years after issue.
Requests can be made outside of the option period to accelerate the next available option date to an earlier date with proof of a life event received at Assurity within 45 days of the event. If acceleration is exercised, the next option date will not be available. Life events are any of the following: marriage, divorce, death of a spouse or child, birth or adoption of a child, loss of employer-paid group disability income coverage or an increase of monthly income of at least 25 percent from the last time coverage was purchased through the policy or this rider.
Availability: Available at time of application only
Issue Ages: 18 through 55, age nearest birthday as of issue date
Renewability: Guaranteed renewable to age 60
Benefit Amounts: $200 up to the amount available based on the insured’s current income and Assurity’s issue and participation limits in effect on each option date (in $100 increments); the sum of all increases cannot exceed the total of the original base policy and SDIR monthly benefits.
Issue Limitations: Available only for applicants initially opting for at least 75 percent of the monthly benefit (base policy and SDIR) for which they are eligible. Not available with substandard policies; available on a case-by-case basis for policies with a policy amendment rider. Not available for government employees.
Financial Underwriting: Income verification required is (a) two paystubs or a Federal Tax Form W-2 for employees not self-employed or (b) two years federal tax returns with all schedules and a Federal Tax Form W-2 for employees self-employed.
Non-Cancelable Rider
The Non-Cancelable Rider makes the insured’s policy and any attached riders non-cancelable. Non-cancelable means that Assurity cannot change the policy or riders by increasing the premiums or canceling prior to termination.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Non-cancelable
Issue Limitations: Not available with substandard policies, occupation classes 2A and 1A, and 10-year, to-age-65 and to-age-67 benefit periods
Own Occupation Rider
The Own Occupation Rider extends the own occupation period for the total disability definition from two years to the period selected.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65, age 67 for to-age-67 benefit period
Benefit Periods: For each policy benefit period, the following rider benefit periods are available:
•5-year policy benefit period – 5-year
•10-year policy benefit period – 5-year or 10-year
•To-age-65 policy benefit period – 5-year or to-age-65
•To-age-67 policy benefit period – 5-year or to-age-67
Issue Limitations: Not available with occupation classes 2A and 1A and 1-year and 2-year policy benefit periods
Residual Disability Benefit Rider
The Residual Disability Benefit Rider will pay a monthly benefit if the insured is residually disabled and the elimination period has been satisfied by any continuous period of total and/or residual disability. Renewal premiums will also be waived on the first premium due date after the insured has been residually disabled for the elimination period or 90 days, whichever is shorter. Any premiums paid during this period, which became due after total disability started, will be refunded.
Benefits will continue and premiums will be waived while the insured is residually disabled or to the end of the residual benefit period, whichever is first. For the first six months of residual disability, Assurity will pay the greater of the residual disability monthly benefit and any partial disability monthly benefit payable but not both. The residual disability monthly benefit is calculated as follows:
[(prior monthly income – current monthly income) / prior monthly income] x base policy monthly benefit
Loss of prior monthly Income greater than 80% will be considered 100% loss.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65, age 67 for to-age-67 benefit period
Benefit Period: 5-year or same as benefit period selected for the policy; 5-year not available for 1-year or 2-year policy benefit periods
Issue Limitations: Not available with occupation class 1A. Available on a case-by-case basis with substandard policies.
Retroactive Injury Benefit Rider
The Retroactive Injury Benefit Rider will pay a benefit if an injury causes the insured to become totally disabled within 30 days of the injury, and the insured remains continuously totally disabled until the end of the elimination period. The benefit, payable as a lump sum after the elimination period, is equal to the base policy monthly benefit times the number of months in the elimination period.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65, age 67 for to-age-67 benefit period
Issue Limitations: No restrictions
Return of Premium Benefit Rider
The Return of Premium Benefit Rider will pay a returned premium benefit upon policy cancellation, policy lapse, the insured’s death or the insured’s attained age 65, or age 67 for to-age-67 benefit period. The benefit is calculated as follows:
1. Add together all policy and rider premiums paid or waived.
2. Multiply this premium amount by the appropriate percentage based on completed policy year. (See following Return of Premium Benefit Schedule.)
3. Subtract from this amount all policy and rider benefits paid.
Availability: Available at time of application only
Issue Ages: 18 through 55; age nearest birthday as of issue date
Renewability: Guaranteed renewable to age 65; age 67 for to-age-67 benefit period
Issue Limitations: Not available on policy with the Critical Illness Benefit Rider
Supplemental Disability Income Rider
The Supplemental Disability Income Rider (SDIR) will pay a monthly benefit less any social insurance benefits received, offset dollar for dollar, if the insured is totally disabled and the elimination period has been satisfied. Benefits will be paid until the insured is no longer totally disabled or to the end of the maximum benefit period, whichever is first. No benefits will be paid if social insurance benefits exceed the SDIR monthly benefit amount.
If the insured receives a lump-sum payment of social insurance benefits, Assurity will treat the lump sum as if it were paid over several months. The lump sum will be divided by the SDIR monthly benefit less monthly social insurance benefits received. The result will be the number of months future rider benefits will not be paid. If the monthly social insurance benefit received exceeds the SDIR monthly benefit, Assurity will not seek refund of past SDIR benefits received before the lump-sum payment.
Availability: Available at time of application only
Issue Ages: 18 through 60; age nearest birthday as of issue date (same as policy)
Renewability: Guaranteed renewable to age 65; age 67 for to-age-67 benefit period
Benefit Amounts: $100 through $1,800 (See Financial Underwriting Guidelines section of the Underwriting Guide); issue amounts rounded to the lowest $5 increment.
Benefit Periods: Same as benefit period selected for policy
Elimination Periods: Same as elimination period selected for policy; when issued in states providing state disability coverage for W-2 employee the elimination must be as follows:
•California – 365 days
•Hawaii – 90 or more days
•New Jersey – 90 or more days
•Rhode Island – 180 or more days
Issue Limitations: Elimination period restricted for states with state disability programs
Social Insurance Benefits:
•Social Security Disability Benefit – Includes any primary or family disability benefits the insured is eligible for under the U.S. Social Security Act or similar law of any other country. Payments under the retirement provisions of the Social Security Act are treated as a Social Security disability benefit.
•Workers’ Compensation – Includes benefits the insured is eligible for under any Worker’s Compensation Act or Occupational Disease Law. Included are all state and U.S. territory laws, as well as laws of other countries.
•Government Retirement and Disability Fund Benefit – Includes any disability benefits the insured is eligible for (including dependent benefits) under any federal, state, county, city or other governmental subdivision retirement and/or disability fund. Retirement benefits from such funds are treated as disability benefits.
•Railroad Retirement Disability Income – Includes any primary or family disability benefits the insured is eligible for under the Railroad Retirement Act. Retirement option benefits under the act are treated as disability benefits.
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Limitations and Exclusions
The following limitations and exclusions apply to the policy as approved in most states. Limitations and exclusions may vary by state. For a list of all limitations and exclusions, refer to the actual policy. Some key differences are summarized in the State Specific Information section.
Limitations
Foreign Travel and Residency
Assurity will pay up to a maximum of three disability monthly benefits for any disability sustained or continued outside the United States or Canada.
Mental/Nervous Disorders; Substance Abuse
Assurity will pay up to a maximum of 24 disability monthly benefits during the insured’s lifetime for disabilities due to mental/nervous disorders and substance abuse.
Pre-existing Condition
If the insured’s disability is within two years from the issue date and is due to a pre-existing condition, no benefits will be paid unless the condition was disclosed and not misrepresented on the application and is not excluded by a policy amendment rider.
A pre-existing condition is a sickness or physical condition for which, during the two years before the issue date, the insured:
•had symptoms which would cause an ordinary prudent person to seek diagnosis, care or treatment; or
•received medical consultation, advice or treatment from a physician or had taken prescribed medication.
Exclusions
Assurity will not pay benefits for conditions that are caused by or the result of the insured:
•being pregnant, experiencing childbirth or having an elective abortion (complication of pregnancy is deemed to be a sickness);
•losing an occupational or professional license or certification;
•being exposed to war or any act of war, declared or undeclared;
•engaging in an illegal occupation;
•participating in or attempting to commit a felony;
•intentionally self-inflicting a sickness or injury;
•committing or attempting to commit suicide, while sane or insane;
•being incarcerated or is caused while incarcerated in a penal institution or government detention facility;
•being intoxicated (as determined by the laws governing the operation of motor vehicles in the jurisdiction where the disability occurs) or under the influence of an illegal substance or a narcotic (except for narcotics used as prescribed to the insured by a physician); or
•actively serving in any of the armed forces, or units auxiliary thereto, including the National Guard or Reserves, except during the active duty training of less than 60 days.
Definitions
The following definitions apply to the policy and riders as approved in most states. Definitions may vary by state. For a list of all definitions, refer to the actual policy and riders. Some key differences are summarized in the State Specific Information section.
Activities of Daily Living (ADLs) (as applies to Catastrophic Disability Benefit Rider only)
Certain basic daily tasks necessary to maintain the insured’s health and safety. For this rider, ADL refers to the activities described below:
•Bathing means washing oneself by sponge bath, or in either a tub or shower including the task of getting into or out of the tub or shower.
•Continence means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).
•Dressing means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
•Eating means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.
•Toileting means getting to and from the toilet, transferring on and off the toilet, and performing associated personal hygiene.
•Transfer and mobility means the ability to move into or out of a bed, chair or wheelchair or to move from place to place, either via walking or using a wheelchair, cane, crutches, walker or other equipment.
Any Gainful Occupation
An occupation, which fits the insured by education, training or experience and replaces or is expected to replace 60 percent or more of their prior monthly income.
Cognitively Impaired (as applies to Catastrophic Disability Benefit Rider only)
Deterioration or loss of ability to think, perceive, reason or remember, which calls for another person’s help or prompting to protect oneself or others. It is measured by clinical evidence and standardized tests approved by Assurity that reliably measure such impairment. The loss in mental capacity must be a result of a sickness or injury, including Alzheimer’s disease, dementia and organic brain damage caused by an accident or head trauma.
Concurrent Disabilities
Disabilities caused by more than one injury or sickness, whether they are related or not.
Elimination Period
The number of consecutive days the insured must be totally disabled before they are eligible to receive the benefits.
Employed on a Full-Time Basis
Working for pay at least 30 hours per week.
Maximum Benefit Period
The maximum period of time any combination of total disability monthly benefits (base policy monthly benefits) and partial disability monthly benefits, if any, are paid.
Monthly Income
The insured’s monthly gross income earned from their occupation including salary, wages, bonuses, commissions, fees and other pay for personal services.
If the insured is self-employed or owns a business, monthly income is their share of gross income earned by the business, plus any salary or draw from the business, minus their share of normal and customary business expenses specified as deductible for tax purposes.
Own Occupation
The occupation in which the insured is engaged at the time their disability begins.
If the insured is unemployed one year or less from the time their disability begins, own occupation will be the occupation in which they were engaged prior to becoming unemployed. If they have been unemployed for more than one year, own occupation will be an occupation which fits them by education, training or experience.
Partial Disability
A degree of disability due to a sickness or injury which:
•starts while this policy is in force;
•requires a physician’s care unless the insured’s physician certifies they have reached the maximum point of recovery;
•for the first two years after the elimination period, keeps the insured from doing one or more, but not all, of the substantial and material duties of their own occupation or results in the loss of 25 percent or more of the time spent by them in the usual daily performance of the duties of their own occupation; and
•after total disability and any partial disability benefits have been paid for two years, keeps the insured from doing one or more, but not all, of the substantial and material duties of any gainful occupation or results in the loss of 25 percent or more of the time spent by them in the usual daily performance of the duties of any gainful occupation.
Pre-existing Condition
A sickness or physical condition for which, during the two years before the issue date, the insured:
•had symptoms which would cause an ordinary prudent person to seek diagnosis, care or treatment; or
•received medical consultation, advice or treatment from a physician or had taken prescribed medication.
Presumptively Disabled
The insured’s permanent and irrevocable loss, because of their injury or sickness, of one of the following: speech, hearing in both ears, sight in both eyes, use of both feet, use of both hands, or use of one hand and one foot.
Permanent and irrevocable loss of sight means both of the insured’s eyes measure at or below 20/200 after reasonable effort has been made to correct their vision using the most advanced medically acceptable procedures and devices available. Permanent and irrevocable loss of hearing means hearing in both ears cannot be restored by hearing aids. The insured will be considered totally disabled if they are presumptively disabled.
Prior Monthly Income
The greater of:
•the insured’s average monthly income for the one-year period immediately prior to their disability; or
•the insured’s average monthly income for the calendar year with the highest earnings of the last two calendar years prior to their disability
Recurrent Total Disability
A situation in which the insured becomes totally disabled, ceases to be totally disabled and then becomes totally disabled again from the same or related sickness or injury. The latter total disability will be considered a recurrent total disability.
Residual Disability (as applies to Residual Disability Benefit Rider only)
A degree of disability due to sickness or injury which:
•starts while this rider is in force;
•requires a physician’s care unless the insured’s physician certifies they have reached the maximum point of recovery;
•results in the insured’s loss of at least 20 percent of their prior monthly income;
•for the first two years after the elimination period, keeps the insured from doing one or more, but not all, of the substantial and material duties of their own occupation; and
•after benefits have been paid for two years, keeps the insured from doing one or more, but not all, of the substantial and material duties of any gainful occupation.
If the insured is totally disabled, they are not residually disabled.
Total Disability
A disability due to sickness or injury which:
•starts while this policy is in force;
•requires a physician’s care unless the insured’s physician certifies they have reached the maximum point of recovery;
•for the first two years after the elimination period, keeps the insured from doing all the substantial and material duties of their own occupation; and
•after benefits have been paid for two years, keeps the insured from doing all the substantial and material duties of any gainful occupation.
If the insured is able to perform one or more of the substantial and material duties of their own occupation for the first two years after the elimination period, or of any gainful occupation after benefits have been paid for two years, they are not totally disabled.
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