| A | B |
|---|
| Elimination Period | A Time Deductible |
| Disability | The inability to work due to loss of physical or mental function; |
| Injury | A bodily injury by accident |
| Sickness | An illness or disease affecting the general soundness of health |
| Permanent Total Disability | The most severe type of disability, meaning the insured will never work again. |
| Temporary Total Disability | This type of disability renders an insured incapable of working for a given time, but recovery is seen |
| Permanent Partial Disability | Usually involves an injury that is permanent in nature (loss of an arm, leg, etc.), but will not stop the individual from returning to work |
| Temporary Partial Disability | The least severe classification of disability and usually characterized by an injury that keeps the individual out of work for a few days, for example a sprained neck |
| Accidental bodily injury | The damage to the body is unexpected and unintended |
| Accidental means | The cause of the accident must be unexpected and unintended |
| Total Disability Benefits | The full amount as specified in the insurance policy for the benefit period for which he or she is qualified |
| Partial Disability Benefits | The inability for the insured to carry on all the duties of his or her job. |
| Residual Disability Benefits | This benefit is based on the proportion of income that the insured has lost, taking into consideration the fact that he or she can work and earn a portion of his/her previous income |
| Lump Sum Benefits | Provide lump sum dollar benefits for various permanent partial injuries under a coverage known as Accidental Death & Dismemberment (AD&D). |
| Capital Sum | The percentage payment is of an AD&D claim |
| Social Insurance Supplement (SIS) or Social Security Riders | Provide payment of income benefits in the following |
| Waiver of Premium Rider | Exempts the policyowner from paying the policy’s premiums during periods of |
| Cost of Living Adjustment (COLA) Rider | Provides for indexing the monthly or weekly benefit payable under a Disability policy to changes in the Consumer Price Index |
| Additional Monthly Benefit Riders | Provides additional benefits during the first six months or 12 months of a claim |
| Rehabilitation Benefit | While totally disabled and receiving benefits, if the insured elects to participate in some form of vocational rehabilitation which is approved by the insurer, total disability benefits will be continued as long as the insured is actively participating in the training program and remains totally disabled |
| Guaranteed Insurability Rider | Guarantees the insured the right to purchase additional amounts of Disability Income coverage at predetermined times in the future without evidence of insurability |
| Delayed Disability Provision | Allows for a 30, 60, or 90 days after an accident as total disability does not always occur immediately after an accident, but may occur days or weeks later. |
| Non-Disabling Injury Rider | This benefit does not pay a disability benefit but rather provides for the payment of medical expenses incurred due to injury which does not result in total disability |
| Return of Premium Rider | Provides for the return of a percentage of premiums paid (usually 80%) during a specific term period (usually every 10 years) minus the claims paid during the term period |
| Annual Renewable Term Rider | Provides a death benefit as well as Disability Income coverage |
| Business Overhead Expense Coverage | This type of insurance does not replace the salary of the individual insured. It DOES provide a stated monthly maximum of benefits for specified eligible expenses required for the maintenance of the business |
| Key Employee Coverage | The person’s economic value to the business is determined in terms of the potential loss of business income which could occur as well as the expense of hiring and training a replacement |
| Disability Buy-Out Coverage | Specifies who will purchase a disabled partner’s interest and legally obligates that person or party to purchase such interest upon disability. |
| Two types of Disability buy-out coverage: | Cross Purchase & Entity Purchase |
| Cross Purchase | This type of agreement states that each owner must buy-out the disabled owner’s share of the business. |
| Entity Purchase | This type of agreement states that the business as an entity will purchase the disabled owner’s interest |
| Short-term Disability | Benefits are paid for a period of 13 weeks to no longer than 104 weeks (two years). |
| Long-term Disability | Benefits are paid for a period longer than 104 weeks is considered and referred to as a long-term plan |
| Non-Contributory | The employer pays the entire cost and income is taxed as ordinary income |
| Fully Contributory | The employee pays the entire cost and income benefits are received tax free |
| Partially Contributory | The cost is paid partially by the employer and partially by the employee. In this case, the |
| Key person Disability Insurance | Insurance for key employees in the event they become disabled and are unable to |
| Business Overhead Expense (BOE) | Reimburses the business owner for the overhead expenses that are incurred while the owner is disabled. The premiums that the business pays for the insurance is tax deductible to the business as a business expense. However, the benefits received are taxable to the business as received |
| Disability Buy-Sell Insurance | Provides funds for the business organization to purchase the business interest of a disabled partner. Premiums are not deductible to the business, but the benefits are received income tax free by the business |
