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Disability Insurance Definitions And Features

1.   Total Permanent.  Total permanent disability happens when, because of an injury or sickness, a person is unable to perform the duties of his occupation, is not engaged in any other gainful occupation, and is under the regular care of a physician.  This type of disability might result from a car accident, which could lead to paralysis.  However, other injuries as a result of such an accident can cause a permanent disability, including loss of eyesight, hearing and speech – not just the loss of limbs.  Total permanent disability is what most people think of when they imagine a disability.

 2.   Total Long Term.  For total long term disabilities, DI income insurance focuses on an individual’s ability to perform the duties of his occupation.  A prime example of a total long term disability is a back problem that makes it impossible to perform the duties of his original occupation.  Back injuries are the second most common type of disability.

 3.   Total Partial.  A total partial disability limits an individual’s ability to work at full capacity for a limited period of time.  For instance, a stress-related heart attack or stroke that requires a period of time of total disability followed by a period of recovery with a partial disability is an example.  Income is less during partial disability because the disabled person performs work at a slower pace or for fewer hours.

4.   Partial Progressive.  This type of disability can result from an illness that steadily worsens over time, and can include such common conditions as multiple sclerosis, arthritis, cancer or diabetes.  There is usually a partial disability for a certain period of time that progressively worsens until it becomes a total disability.  Note – a lower premium for disability insurance often has hidden caveats and benefit restrictions that are not apparent until a claim happens.  If a low-price DI policy does not pay benefits when needed, this can be a very costly discovery.

 5.   Short Term.  A fracture, sprain, or an illness such as hepatitis can cause an individual to take a short term leave of absence from work.

The following are 3 examples of policy features that can meet your needs:

 1.   Extended coverage benefit to care for loved ones.  When a family member or loved one becomes ill, a person is forced to make a very tough decision: stay at work and continue earning a full income, or take a leave of absence from work and potentially lose income.  In this situation, some may even have to consider taking early retirement, quitting their job or dramatically reducing their working hours.  An already emotional and stressful time is now tainted with financial worry.  Time, sometimes limited time, with a loved one is invaluable.  DI policies that offer a compassionate extended coverage option can be a solution to this problem.  This feature pays a monthly benefit proportionate to the insured’s loss of income if they must take time off from work to care for a loved one with a serious health condition.  It offers peace of mind and reduces financial concern so an individual can focus on providing care, and spending time with, their loved one during a critical time.

 2.   Partial disability provision that encourages returning to work. When partial disability occurs, individuals are only able to work in a limited capacity, which can adversely impact their paycheck.  A partial disability benefit that encourages a return to work can allow an individual to work part-time, rather than having to file for total disability to collect benefits.  Policies that include a partial disability provision can pay benefits for an extended period of time if the disabled insured has a loss of time, duties or income, regardless of the amount of income earned when returning to work.  After recovering from the disability, the insured will receive a recovery benefit if he continues to have a loss of income due to the sickness or injury that caused the disability.

 3.   Mental Health Coverage.  Mental health disorders such as anxiety, depression, and stress can impact a person’s work performance much like a physical issue.  A key DI policy feature is one that offers coverage for mental disorders or substance abuse without any special limitations.  Many policies put limitations or restrictions on this type of coverage, which reduces the value of the benefit.

Contact Kessler & Associates, P.C. if you need a disability insurance review.