Call To Us
318.213.2500

Glossary


A
Accumulation Period: A period of consecutive months that begins on the first day of disability and during which the elimination period must be satisfied.

Association Disability Insurance Coverage: Disability insurance provided through an association. Typically resembles group coverage that is issued to employees of a business or non-profit entity under a master contract.

Attending Physician Statement (APS):A report, completed by the proposed insured’s physician, which documents current and prior health history. Used in the evaluation process of approving an application (or claim).

Automatic Increase Rider:An optional benefit that provides automatic increases each year without evidence of financial or medical insurability.
Back To Top

B
Beneficiary: A person(s) or entity designated to receive proceeds from an insurance policy upon the death of the insured. Some disability policies have a small death benefit.
Benefit Amount: For disability insurance, the benefit amount is expressed as the maximum monthly dollar amount payable to the insured.

Benefit Period:The longest period of time for which benefits are payable for continuous disability. Typical benefit periods are two-year, five-year, to age 65, 67, 70 or lifetime.

Benefit Percentage: A percentage of the insured's pre-disability income used to calculate the amount payable to the insured on disability.

Business Overhead Expense Policy:A policy that reimburses a business owner for the day-to-day operating costs and expenses of the business in the event of a disability. This type of policy usually has a one or two year benefit period.

Buy-Sell Disability Insurance Policy: A policy that pays to the insured's business partners an amount to buy out a disabled partner's share or interest in the business. A buy-sell agreement between the partners would be used to define the terms and conditions of this transaction.
Back To Top

C
Conditional Receipt:A receipt given for premium payment accompanying an application for insurance. If the application is approved as applied for, the coverage is effective as of the date of prepayment or the date on which the last of the underwriting requirements, such as medical examination, has been fulfilled.

Conditionally Renewable: Policy option where the insurance company will renew the disability policy if the insured complies with certain conditions. For example, that insured is still actively working would be a condition.

Consumer Price Index:The Consumer Price Index for All Urban Consumers as published by the Federal Department of Labor. This index shows the rate of change in the cost of living (inflation) in the United States.

Continuous Disability: A disability where the insured is continuously disabled or when recurrent periods of disability are from the same cause and are separated by a limited period of time, usually 12 months.

Conversion Privilege:The right given to an insured person to change insurance without evidence of medical insurability, usually to an individual policy, upon termination of coverage under a group contract.

Cost of Living Rider:An optional rider that increases the disability benefit each year during periods of disability based on a consumer price index.

Cross-Purchase Arrangement:An arrangement between two or more business owners that, in the event of an owner’s death or disability, the remaining owner or owners will purchase the business interest of the deceased or disabled owner.
Back To Top

E
Earned Income:Gross salary, wages, commissions, fees, etc., derived from active employment. This does not include investment income, rental income, or amounts received from annuities or insurance policies.

Elimination Period:The consecutive number of days for which no benefits are payable at the start of a claim. An insured must be disabled all of those days before benefits are payable. Typical elimination periods are 30, 60, 90, 180, or 365 days.

Exclusions:Certain conditions or causes that are not covered by the disability insurance policy. Some exclusions are standard for all policyholders and some can be an exclusion rider specific to the insured due to health, lifestyle or other issues.
Back To Top
 
F
Financial Underwriting: A method the insurance companies use to evaluate the earned income and other financial data to determine the amount of monthly disability benefit an applicant qualifies for.

Future Increase Option:An optional benefit in a disability income policy that allows the insured future increases to the policy monthly benefit at specified dates (typically on insured’s policy anniversary), with a requirement of only financial (and not medical) insurability.
Back To Top

G
Grace Period: A period of 31 days after the premium due date in which the premium must be paid in order to avoid policy termination.

Graded Premium:A premium structure where premiums start out low and increase annually. If the insured starts with a graded premium, they may change to a level premium on a policy anniversary. Premiums will then be based on attained age.

Group Disability Insurance: A disability policy covering the employees of a business, union, or non-profit organization under a master contract.

Guaranteed Renewable:A type of insurance that cannot be canceled or altered by the insurance company as long as the insured continues to pay premiums on time. However, the premium may be increased for classes of insured’s.
Back To Top

I
Income:Gross earned income, less business expenses, but before any other deductions. Income includes salaries, wages, fees, commissions, bonuses, business profits, or other payments for personal services. It does not include unearned income from savings, investments, or real property.

Indexing:A provision that increases the insured’s pre-disability earnings every year according to a given formula, so that residual disability benefits will not lose purchasing power because of inflation.

Insurance Company Ratings: There are five major insurance industry ratings services: A.M. Best, Standard & Poor's, Moody's, Duff & Phelps, and Weiss. These ratings companies provide a ratings system based on an insurance company's financial performance, stability, claims paying ability and other factors. Each company uses different terms for each rating. For example, the top rating with A.M. Best is A++.

Inspection Report: A report where a representative of the insurance company conducts a phone interview with the applicant to gather the applicant's health history, employment and other information used in the underwriting process.
Back To Top

K
Key Employee: An owner or highly skilled and valuable employee whose efforts are very important to the success of the company.
Back To Top

L
Level Premium:A premium that remains the same through the insured’s age 65.

Lifetime Disability Benefit:A benefit that is payable for the insured’s lifetime, if the insured is continuously and totally disabled before a specified age (i.e., 45 or 55).

Loss of Income:The difference between an insured’s prior income and current income. In better policies, if the loss of income is more than 75 percent of prior income, the loss is deemed to be 100 percent for purposes of the Residual Disability Rider.

Loss Payee:The individual or entity named to receive all benefits.
Back To Top

M
Medical Underwriting: An insurance company's evaluation of an applicant's health and medical history to determine insurability. Attending Physician Statements (APS), Inspection Report, and a Paramedical Exam are the primary tools for medical underwriting.

Monthly Indemnity:The amount the insurer will pay for each month of total disability.
Back To Top

N
Non-Cancelable:A policy that cannot be canceled or altered by the insurance company as long as the insured continues to pay premiums on time. This type of policy’s premium will not increase up through the insured’s age 65.
Back To Top


O
Occupation:An insured’s regular occupation or profession at the time of becoming disabled.

Occupation Class: An underwriting and policy category in which the insured are placed based on their specific occupational duties.

Optional Benefit:An additional benefit offered by the insurance company to certain occupational classes, which may be included in a policy at the applicant’s request, for an additional premium.

Owner:The owner of the insurance policy has rights that might include, but are not limited to, the right to information on the policy, the right to renew the policy, and the right to request changes in the policy.

Own Occupation:A term that defines the most liberal wording of the total disability contractual provision. If the insured cannot perform the duties of his or her own occupation due to sickness or injury, the benefit will be paid even if income is earned in another occupation. A physician or dentist’s medical specialty will be deemed their occupation.
Back To Top


P
Paramedical Exam: A short medical exam that includes an interview of your medical history, height, weight, blood pressure, pulse, blood and urine sample and occasionally based on higher insurance amounts an EKG and X-ray.

Partial Disability:An insured’s physical inability to perform some, but not all, of the duties of his or her regular occupation due to sickness or injury.

Participation Limit:The total amount of coverage that will be allowed by a company from all carriers.

Policy:All material that constitutes the contract of insurance.

Policy Term:The effective period of the policy, usually the period for which premiums are paid.

Pre-Disability Earnings:The earnings level of the insured prior to the onset of disability.

Pre-Existing Condition:An injury, illness, or physical condition that existed prior to the issue of the disability policy.

Premium: The periodic payment required to keep an insurance policy in force.

Premium Mode: The premium payment frequency selected by the insured. Most policies offer annual, semi-annual, quarterly, or monthly bank draft options.

Presumptive Disability:The presumption that the insured is totally disabled, even if still at work, if sickness or injury results in the total and complete loss of sight in both eyes, hearing in both ears, power of speech, or use of any two limbs. The elimination period is waived from the date of the loss and total disability benefits are payable while such loss continues until the end of the benefit period.

Prior Expenses:An insured’s average monthly expenses for the same tax year in which his or her prior income is based for purposes of the residual disability rider.

Prior Income:The insured’s average monthly income for the tax year with the highest earnings in the three years just prior to the date on which he or she became disabled.
Back To Top


R
Recovery Disability Rider:A rider that provides reduced benefits when and insured returns to work after a compensable period of total disability.

Recurrent Periods of Disability:Also known as successive periods of disability, where the insurance company will consider recurrent or successive periods of disability as one period if they are caused by the same or related conditions, they are separated by a defined maximum time period (usually 6 months or 365 days), and each begins while the policy is in force. This protects the insured in this circumstance by not restarting the elimination or benefit period.

Rehabilitation Benefit:A benefit paid to help meet some of the costs an insured may incur by enrolling in a rehabilitation program for the purpose of returning to his or her occupation.

Residual Disability: A disability in which the insured is at work and not totally disabled, but due to an injury or illness, they suffer a loss of income.

Residual Disability Benefit:A provision that pays a partial benefit for a partial disability. A person is considered residually disabled if they are at work and not totally disabled, but due to an injury or illness, they suffer a 20% or more loss of income (Some companies also include a loss of time requirement or the inability to perform some duties of the insured’s regular occupation).
Back To Top


S
Social Insurance Substitute Rider:A rider that pays a benefit if the insured is disabled under the policy and not receiving social insurance benefits.

Surgical Transplant Benefit: A provision where the insured will be considered disabled as a result of a transplant or donor surgery if the disability was due to a sickness.

Survivor Benefit: If the insured dies while monthly disability benefits are being paid on a policy, this benefit would pay an amount to a designated beneficiary. This lump sum is typically around three months of disability benefit.
Back To Top

T
Total Disability:The physical or mental inability to perform the major duties of one’s occupation because of sickness or injury.

Transplant Donor Benefit:In some policies, a provision that the insured will be considered disabled as a result of complications incurred during a transplant or donor surgery.
Back To Top

U
Underwriter:The insurance company employee who assesses the risk of an applicant for coverage or a policy.

Underwriting: The process of assessing risks and classifying them according to their degree of risk of loss so that the appropriate rates may be assigned based on each applicant's risk profile. This process includes complete rejection of risk (uninsurable).

Uninsurable: Someone who is not insurable due to an excessive risk of loss.
Back To Top

W
Waiting Period:The consecutive number of days for which no benefits are payable at the start of a claim. An insured must be disabled all of those days before benefits are payable. Typical elimination periods are 30, 60, 90, or 180 days.

Waiver of Elimination Period:In some policies, the elimination period will be waived if the insured becomes disabled within five years after the end of a period of disability that lasted longer than six months and for which benefits were paid.

Waiver of Premium:In some policies, a provision that relieves the insured of making premium payments after he or she has been disabled for 90 days, or the elimination period, if shorter. In addition, premiums paid during those 90 days are refunded and premiums due during the 90 days after recovery are waived.

Worker’s Compensation:Benefits paid to a worker to compensate for losses caused by a work-related injury or illness.
Back To Top

Quote Request

Insurance Type:
Name:
Mail
Phone:
Mail
E-mail:
Occupation:
Mail
Annual Income:
Mail
Date of Birth:
Mail
Gender:
Health History: