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Life and Health Insurance Agency

A disability insurance policy is a contract which transfers the economic risk of disability to the insurer in exchange for a premium. These policies also referred to as income replacement, loss of income, and loss of time insurance, offer protection coverage with selectable policy durations. Policies are available to protect individuals or even a business from the financial burden associated with disability.

• Total Disability - is when the insured cannot perform duties of their own occupation for a specified period of time. Depending on the insured’s occupational classification, total disability coverage is offered for up to 5 years, 10 years, to age 65, or life. The insured is entitled to total disability benefits even when earning an income at another occupation.
• Partial Disability - the inability to perform one or more key duties required of the insured’s occupation. Benefits for partial disability are usually half of the total disability benefits. The maximum benefit period is shorter, generally 3 and 6 months.
• Presumptive Disability - benefits are generally payable for the length of the policy without the requirement that the insured no longer be earning income. Some insurance companies require a loss of earnings test before benefits are payable. These specific types of disabilities are usually medically defined in the policy and include loss of:
• sight;
• hearing;
• speech; or
• two limbs
• Residual Disability - provides a reduced monthly benefit in proportion to the insured’s loss of income when returning to work and is engaged in their normal occupation but with a reduction in pay. An additional premium is required for this benefit. Generally, no benefits are paid if the loss of income is less than 20 or 25%.

Disability Insurance provides compensation of typically 70% of the insured’s earned income while disabled due to accident or illness. The amount of coverage is based upon the dollar benefit amount, the waiting period involved, and the maximum benefit period. Policy options for benefit periods range from 2 years, 5 years, to age 65, or for life.

• Individual Disability Income Insurance - policies which protect individuals and families against financial loss due to the disability of the wage earner.
• Business Overhead Expense Insurance - provides coverage of the business overhead expenses that continue when the business owner is disabled. These policies provide monthly payments that are based on the actual expenses.
• Business Health Insurance – varies in form and are very similar to the business uses of life insurance which include Key Employee disability coverage, Group Credit Health protection, and Disability Buy-Sell benefits.
• Disability Reducing Term Insurance – protection is utilized in connection with a financial obligation such as a mortgage.