Disability income coverage replaces part of earnings when the insured meets a policy’s disability definition. The size and duration of benefits depend on more than the diagnosis: occupation, work capacity, income loss, waiting period, benefit period, and claim proof can all matter. This unit moves from product design to definitions and then to benefits and riders.
Learning path
- Disability Income Insurance : Individual and group disability income, business overhead expense, buyout, and key-employee coverage; elimination periods, benefit periods, coverage calculations, and offsets.
- Disability Definitions and Work Capacity : Own-occupation and any-occupation language and total, partial, residual, and recurrent disability.
- Disability Benefits, Riders, and Claims : Future-increase options, waiver of premium, claim considerations, and tax effects tied to premium funding.
Apply the unit
A surgeon can no longer perform surgery but can teach part-time at lower earnings.
- Identify the occupational definition, whether the contract has residual benefits, the elimination period, and what evidence is needed before predicting payment.
Study checkpoint
- Can you distinguish elimination period from benefit period?
- Can you compare own-occupation with any-occupation?
- Can you distinguish partial from residual and recurrent disability?