Continuing our series on insurance definitions, this post finds us starting with the letter I. As stated in our previous posts, the purpose of this series is to help you make better informed decisions when you are shopping for disability insurance. Keep in mind that many of these terms can be applied to other types of insurance, as well.
Illegal Occupation
This protects the insurance company from any possible losses that might come from the insured getting injured while engaged in a crime or criminal activity (robbing a bank, trafficking drugs, etc.).
Intoxicants and Narcotics: Works the same as an illegal occupation provision, protecting the insurance company from loss if the cause of disability was from the use of alcohol or narcotic drugs.
Insuring Clause: The statement that defines the policy. The main parts it covers are the type of policy, the parties to the contract (insured and company) and the responjsiblities of each party to carry out the contract (insured pays the premium on time, the company will pay benefits upon acceptance of a claim).
Misstatement of Age or Sex: Two major factors that determine premium and benefit amount are the insured’s age and gender. If either of these are misstated, the insurance company reserves the right to adjust premiums and/or benefits to reflect the change to the correct information.
Net Worth: The value of things you owe (debts/liabilities), subtracted from the value of what you own (assets), produces your net worth. A very high net worth (in the multiple millions of dollars) might deem you self-insured, and thus an insurance company isn’t likely to place a policy for you. Such a high figure suggests you can take care of yourself in the event of a disability.
Notice of Claim: The insured generally has 20 days from the date of the disabling injury or illness to notify the insurance company of an impending claim. The claim can be made in written form or by phone. Notifying your agent counts as notifying the company.