Chapter 2
Disability Policy Definitions & Provisions

The important points addressed in this lesson are:

A disability income policy's renewability provision determines the policy's guarantees with respect to the insurer's right to cancel coverage or raise premiums

The definition of total disability in a typical disability income policy is couched in terms of the insured's inability to work and makes no mention of income loss

An income replacement contract, which is an alternative to a traditional disability income policy, generally contains no definition of disability; it pays a benefit based solely on income loss resulting from sickness or accident

An elimination period is the period following the onset of disability before benefits are payable and may be as short as zero days or as long as several years

Split elimination periods may be used to enable an underwriter to provide needed coverage without exposing the insurer to undue risk

Policy benefit periods may provide benefits for as short a period as two years or for as long as the insured's entire lifetime

Exclusions and limitations in a disability insurance policy serve to limit the insurer's liability for disability arising from certain conditions or to eliminate that liability entirely

The exclusions and limitations in disability insurance policies are generally limited to pre-existing conditions, acts of war and service in the armed forces

Definition of Disability
Pre-Existing Conditions
Elimination Period
Benefit Period
Exclusions & Waivers
Premium Waiver
Non-Disabling Injuries
Rehabilitation Benefits
Chapter 2 Review