We are in the middle of a series of posts where we help you understand the jargon that is used in the insurance industry to describe various provisions, rules and details of disability insurance policies. Knowing these terms will help you make an informed choice when you are shopping for the best policy for you and your family.
We’ve been going in alphabetical order, and the first four posts got us through terms beginning with A through N. This installment begins with the letter O.
Occupational Coverage
This provision provides for coverage to the insured regardless of whether the disabling injury or illness occurs on or off the job. Some policies have non-occupational coverage, which only covers disabilities that are not related to your work.
Partial Disability: This provision allows for benefits to be paid if a disability prevents the insured from performing one or more (not all) of the main job duties. Partial disability benefits are usually half of a total disability benefit and are paid for three to six months.
Payment of Claims: This just defines who gets the benefit payment – most of the time it is you, the insured, though you may fill out a form and assign payments to a doctor, hospital or creditor if necessary – like, if your payment would pay your mortgage, you could assign the benefit to go directly to the bank or financial institution that holds your mortgage.
Permanent Disability: A disability that severely reduces, or eliminates, your ability to do your job. A permanent disability can be the loss of a limb or organ like an eye, hand or leg.
Physical Exam: After a certain period of time, the insurance company may request a physical exam by one of its recommended doctors (at the company’s expense) to show continued disability – this time frame is usually based on an average recovery period for the type of injury or disability.
Policy Changes: Any changes to a policy must be made in writing and usually signed in consent by the insurance company and the policyholder. Those changes become part of the policy.
Presumptive Disability: The presumption is total and permanent disability when it comes to loss of multiple limbs, sight, hearing, speech, etc. The company will not request a physical exam to prove continued disability when it presumes such under these circumstances.
Probationary Period: Applies to group insurance, this is the amount of time a new employee would have to work continuously at the company before being eligible for the coverage.
Proof of Loss: Besides the claim forms, you (the insured) would have 90 days to submit proof of loss, which includes date, time and nature of the accident, injury or illness, and contact information for the attending physician providing treatment, as well as a written statement from the physician confirming the disability and expected duration.