Elements of a Policy

 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

 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

 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” important  Total 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 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

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

 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

 In considering a disability insurance policy you must consider  How much?  How soon?  How long?  The policy’s definition of disability