If were to purchase a disability insurance policy, what types of disabilities would I be covered for?

  1. 11498 POINTS
    Jason GoldenzweigPRO
    Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
    Determining whether a disability will qualify you for a claim depends upon the policy's "definition of disability". It's not something where one type of disability is covered and another may not be just because it's a different kind. It's about whether your specific disability is covered under policy's definition of disability.

    The definition of disability is the most important factor under any disability insurance policy. A disability insurance policy will have 1 of 3 definition options (varies by carrier - some may only offer one definition, others may offer more than one as it would then depend upon type of disability policy being set up (e.g. long-term vs. short-term, group vs. individual, etc.)) - 1) True Own Occupation, 2) Modified Own Occupation, and 3) Gainful Occupation.

    True Own Occupation is the most desirable definition you can have on a disability policy. This says that you are considered completely disabled if (due to injury or sickness) you are not able to perform the duties of your job, EVEN IF YOU ARE WORKING AT ANOTHER JOB (this last part is key!).

    Modified Own Occupation is the most common definition that policies offer in today's marketplace. Under this definition, you are completely disabled if (due to injury or sickness) you are not able to perform the duties of your job, AND ARE NOT WORKING IN ANY OTHER JOB (again, this last part is key!).

    Gainful Occupation is typically seen in group disability policies and policies offered by property and casualty companies that offer disability policies. This definition is the most stringent saying that you can't work in your own occupation and unable to work in any gainful occupation for a period of time (e.g. 12 months, 24 months, etc. - can vary by company).

    Also, whether you want to buy a short-term disability policy or a long-term disability policy is important too. You can have a combination of both.

    I would recommend reviewing your needs and goals with an independent agent who works with multiple carriers and can help determine the program structure that will best serve your needs because disability policies are very customizable as there are a number of additional options to choose from that affect the rates. It's not a "just pick and choose who has the lowest rates" type of insurance - you really want to make sure you've got the right coverage for what you're trying to accomplish.

    I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.
    Answered on March 2, 2015
  2. 37376 POINTS
    David G. Pipes, CLU®, RICP®PRO
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The definition of disability is precisely presented in the disability policy and sales material. It varies between companies and contracts. The most liberal definition is any disability that prevents you from engaging in your current occupation. There are much more restrictive definitions even down to, “disability is the inability to perform any work.” As a general rule the most liberal definitions appeal to highly specialized professionals. Often these individuals could do any number of other occupations but if their job is to do heart catheterizations they want to be reimbursed any time they are unable to do that amazing subspecialty.
    Answered on March 2, 2015
  3. 10968 POINTS
    Tim WilhoitPRO
    Owner, Your Friend 4 Life, Brentwood TN
    Other than an exclusion of a certain type of disability in the policy, if you have been medically diagnosed with an injury or illness that keeps you from performing the duties of your current occupation then you should become eligible for benefits. Please keep in mind that your policy is still subject to elimination periods before you actually receive payments. Most good policies do pay from day one on the day of eligibility in a lump sum.
    For example, if you chose a 90 day elimination period for $5,000 per month, you will receive $15,000 on the 91st day. I wish you a speedy recovery.
    Answered on March 9, 2015
  4. 11773 POINTS
    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    When considering a disability policy to purchase, consider everything, but focus on a couple of things. 1st, the easiest way to find out what the policy wouldn't cover is spelled out on the exceptions page or not covered section. Straight forward it will state directly what the policy won't do.
    2nd, read their definition of disability. This may sound strange to read, but the best policies for disabilities have the shortest definitions of disability. Basically when you read the definition, anything beyond that first sentence is something that will reduce your benefit.

    For example, my disability policy defines total disability as "not being able to do your current job and under a doctors care." That's it, that's all. Nothing follows it. It doesn't care if I can do my job or another, just my current job. End of story.

    Also, when you consider a DI policy look at residual coverage. Residual is for partial disabilities where you can work, but not as much as before. It will have a similar definition as total disability, but will define by percentage of work you can or can't do. So half time would be 50% loss. A good residual definition will also determine at what point partial becomes fully.

    I write this as I am on claim on my own disability policies. I contracted an infection that lead to an amputation. Believe me, a good policy doesn't present you with too many hoops or requirements to meet.
    Answered on May 17, 2015
  5. 11773 POINTS
    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    Just a quick note as I read another post and need to clarify an incorrect statement regarding elimination periods. YOU are NOT reimbursed for your choice of elimination period. If you choose a 60 day elimination period, your benefits start on the 61st day and payment is usually made on the 91st day and monthly there after. You are not compensated for your choice of elimination period. The elimination period is like choosing your deductible on your health, home or auto insurance. It is the time you are willing to self insure your situation. You are not compensated for your choice of elimination period. Your choice of elimination period effects your premiums.
    Answered on May 17, 2015
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