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A waiver of premium rider is an insurance policy clause that waives premium payments if the policyholder becomes critically ill, seriously injured, or physically impaired. Other stipulations may apply, such as meeting specific health and age requirements. This clause is typically used with permanent life insurance policies. Most commonly, waiver of premium occurs or is applicable at the point of a disability, but not the death of the policy holder. The question is a waiver of premium rider worth it? One in four people become disabled throughout their careers, making buying additional disability coverage an important precaution. But, most people are better off buying a disability insurance policy instead of adding a waiver of premium rider to a life insurance policy. As long as benefits are being paid out, no further disability premium payments are required from individuals who become disabled and qualify for benefits. The waiver of premium is typically issued after the insured h...

Waiting Period A stated period in various forms of insurance (as accident and health, workmen's compensation and unemployment or idleness insurance) after the beginning of disability during which no benefits are paid. To become eligible for coverage the insured must be disabled for a certain number of continuous days. This is also called the elimination period. Waiting period was introduced to prevent unethical practices by clients to get insurance benefits. For example a client is diagnosed of a critical illness but did not have a health insurance cover the doctor recommend an expensive surgery which they could not afford through their regular income. As a result he/she buys a health insurance cover without disclosure of the desease. Various insurance policies can have waiting periods, including homeowners insurance, auto insurance, and short-term disability. Waiting periods for different services can sometimes vary between insurers, but the specific regulators pre-defines ...

Uninsurable Risk Risk describes the likelihood of certain events happening. Insurance is designed to provide coverage for events that are unlikely (in terms of their occurrence, their premature/untimely nature or their intensity), instead of things that are highly likely to happen. A risk considered predictable in nature is a risk an insurer is unlikely to cover. An uninsurable risk are insurable but not accepted for insurance due to excessive risk of loss. For example, this may be where an event is inevitable (such as a terminally-ill person's death), gradual (such as rust or corrosion) or against the law. A life insurance coverage to a 100 year old man. There is no way the insurance company could collect enough premiums in such a short time to offset the amount paid out. Accepting this applicant would mean burdening the pool of other insureds and drive premiums up for everyone else. An uninsurable risk could include a situation in which insurance is against the law, such as c...

Total Disability/Totally Disabled An individual qualifies as totally disabled if, due to illness or injury, he is unable to perform the substantial and material duties of his occupation; is not engaged in any other occupation; and is under the care of a physician for the illness or injury. As long as an employee has long term disability insurance coverage at the time they become disabled, they are qualified to apply for long term disability benefits. The conditions covered by a policy range from physical injuries to mental health illnesses. Once employee can not has a physical or mental condition, and a doctor determines that the condition has lasted or can be expected to last continuously for at least a year or can lead to death.If that is the case, the individual should be able to apply for and receive long-term disability (LTD) benefits. When you first apply for long-term disability benefits, the assessment of total disability is based on whether you can perform the duties and ...

Term of Policy/Policy Renewability Policy Term: Term insurance provides coverage for the specified number of years, known as the policy term. In case of an unfortunate event during this period, your nominee will receive the sum assured in your policy. The renewability clause explains the insurer's right to terminate (not renew) the coverage at the end of a policy year. The most common renewability clauses are listed below. They are listed in the order of how much control the insurer has to terminate coverage (from least to most): -Non-cancelable -Guaranteed renewable -Conditionally renewable -Renewable at the Option of the Insurer -Cancelable The term of policy/policy renewability is the time period for which a policy is in force. Disability insurance is usually guaranteed renewable annually until the insured reaches the required age 60 or 65 years of age depending on the jurisdiction. Some policies are conditionally renewable until age 70 years A disability income insuran...

Survivor Benefit The survivor benefit is an amount payable to the insured, the insured’s estate or the insured’s designee, if the insured dies while receiving total disability benefits. The survivor benefit is a lump sum payment that provides benefits to the insured’s eligible survivors. In most cases, survivor benefits are based on the amount the deceased was receiving from Social Security at the time of death (or was entitled to receive if he or she died before filing for benefits). Survivor benefit is pretty simple to understand for example. Widow or widower, full retirement age or older 100% of the deceased worker's benefit amount. Widow or widower, age 60 full retirement age 71½ to 99% of the deceased worker's basic amount. Widow or widower with a disability aged 50 through 59 71½%. Survivor benefits are different from Social Security's lump-sum death benefit, a one-time payment of XXX amount to a deceased beneficiary's family. To receive this payment, you m...

Supplemental Health Statement This form provides the underwriter with additional details about the applicant’s health. This document contains a series of questions about your overall health, such as if you are a smoker or if you have ever been treated for a medical condition, like cancer or high blood pressure. This information helps your insurer evaluate your life insurance application. Supplemental Health Statement is a signed statement assuring the company that the policyowner represents the same risk to the company as when the application was first signed. If for instance your health information is confidential the privacy law would apply strict standards for privacy and confidentiality, as with all or most insurance processes. At times you may be required to submit additional medical information details explaining your response on the SHS. Once submitted, as some answers may require additional medical information. Having an existing medical condition you would still be requ...

Standard Risk Class A standard risk refers to an insurance risk that an insurance company's underwriting standards considers common or normal. In technical terms a standard risk class is the group whose morbidity rate is thought of as average. For life insurers, standard risk means an average life expectancy. You may have some health issues in your family or in your past, which keeps you out of more preferred risk groups, resulting in higher premiums. Contrarily a Sub-Standard risk is an underwriting classification for individuals that have significant health concerns. Generally, sub-standard risks have a shorter than average life expectancy due to a health impairment and will therefore pay higher premiums for their insurance than preferred or standard risk individuals. If you are classified as a higher risk than standard, you are subject to various degrees or ratings of substandard, which each insurer approaches a bit differently. This can be because of health issues or a ris...

Smoker Rating We all know smoking invites health concerns, and insurance companies know it too. Like your parents and your doctor, they see smoking as a significant health risk Policy applicants who use tobacco products are subject to a higher premium rate, called a smoker rating. Those who do not smoke or use tobacco products are given a lower premium rate. If an applicant smoked in the past, but has quit more than a year ago, most insurers will still consider the applicant as a non-smoker. Nicotine can be detected in routine screening tests commonly required by most insurance companies. The question one often ask is; can I get life insurance as a smoker a bsolutely YES, In fact, many successful life insurance applications are made by smokers, so not only is it possible, it happens often. Must insurers consider vaping the same as smoking when it comes to life insurance (as well as e-cigarettes, Bidis (thin hand-rolled cigarettes), Cigars, Pipes, Hookahs,Chewing tobacco, Snuff,...

Return to Work Provision An additional incentive is usually provided for a period of time to encourage disabled employees to return to work. When you are ready to return to work, you might return on a gradual basis. This is called a return to work provision. The insured can receive up to 100 percent of pre-disability earnings, based on a combination of disability benefits and return-to-work earnings, under this provision. A return to work program establishes transitional tasks that are medically approved and temporary for assignment during your employee's recovery period. By returning an injured employee to work, you can: Promote healing by keeping your employee active. Returning to work does not mean that you are completely healed and that you can stop your treatment. The purpose is to allow a smooth transition back into your job function while continuing to participate actively in your treatment plan. Psychological support from a therapist, and your family, friends and coll...

Return of Premium (ROP) It is the amount due the insured if the actual cost of a policy is less than what the insured has previously paid for example, if the limits are reduced, the estimated exposure at inception is greater than the audited exposure, or the policy is canceled. How does return-of-premium life insurance work? Return-of-premium life insurance can be sold as a standalone policy or as a life insurance rider, which gets added to a standard term policy. When you buy return-of-premium coverage, you typically select a term length, such as 20 or 30 years. If you die during that time, your beneficiaries receive the death benefit. If you outlive the policy, you get back exactly what you paid in, with no interest. The money isn't taxable, as it’s simply a refund of the payments you made. This benefit refunds a percentage of the premium (provided there are no claims) at specified intervals during the life of the policy. The good thing about return of premium is that, adding...

Residual Disability Rider A residual disability benefit rider (also called a partial disability benefit rider) may provide benefits if you are suffering from an illness or injury that results in your inability to to work at 100%. If the insured is residually disabled they are not totally disabled and have been unable to complete at least 20% of their work time or more. In this case, the residual disability rider provides a proportional monthly benefit, corresponding to the percentage of time lost. If you need income protection and can still work, but not full time. If a policyowner becomes sick or injured but is still able to work part time, a residual disability benefit can help fill the resulting income gap. The recovery benefit can help clients maintain their income while they return to full-time work. Residual Disability Rider provides a minimum of 50 percent of the full benefit for at least six months when the policyowner demonstrates a loss of income and either loss of time w...

Renewability Provision Renewability provisions in health and disability insurance specify whether the policyholder or the company can terminate the policy, whether or not premiums or the cost of the policy will change, and whether the policyholder needs to provide updated medical information to the insurance company. This provision determines the terms of renewal. Common examples include conditionally renewable, guaranteed renewable and non-cancelable. The renewability provision in a cancelable policy allows the insurer to cancel or terminate the policy at any time, simply by providing written notification to the insured and refunding any advance premium that has been paid. The renewability feature allows the coverage to be renewed for another period or another term without the insured having to provide proof of insurability, meaning that even those who have become uninsurable are guaranteed the right to renew the policy. Renewability Provision is different from conditionally rene...

Rehabilitation is defined as “a set of interventions designed to optimize functioning and reduce disability in individuals with health conditions in interaction with their environment The rehabilitation benefit is an added benefit for those who join a vocational rehabilitation program approved by the insurer. While still receiving total disability benefits, the rehabilitation benefit will pay any reasonable costs of the program that are not covered by other plans, policies or programs. Globally, an estimated 2.4 billion people are currently living with a health condition that benefits from rehabilitation. (Source: WHO) There are three main types of rehabilitation therapy are occupational, physical and speech. Each form of rehabilitation serves a unique purpose in helping a person reach full recovery, but all share the ultimate goal of helping the patient return to a healthy and active lifestyle. The aim of rehabilitation is to maximise the potential to restore a person who has a...

Regular Occupation The term regular occupation refers to the insured’s job at the time the disability began. We will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. Unfortunately, there is no general standard or definition for a “regular occupation.” Instead, different jurisdictions circuits have taken different approaches. This means that the definition of regular occupation will vary depending on where you live. Many long lerm disability (LTD) policies stipulates that if you are unable to perform your regular occupation you may be entitled to Long Term Disability benefits. Most people assume that if they become unable to perform their usual work on account of sickness or injury, that they would qualify to receive benefits under their work-sponsored long-term disability insurance coverage. That may not true in all cases. Generally the insurance carrier will look at the occupation as it is normally performed in...

Rehabilitation Rehabilitation is a program of clinical and vocational services that aids in the restoration or improvement of the insured’s health and functionality. The goal of rehabilitation is the return of a disabled person to work and health. The goal isn’t always return to work. The rehabilitation process is usually geared towards a return to wellness and, to some extent, work readiness. Although there is no denying the health benefits of work, the goal isn’t always returning employees to work. Unlike most other sectors, life insurers do not have a strict obligation to get people back to work. Typically, there are two parts to the average rehabilitation benefit: -One part guarantees that participation in a rehab program will not be considered as a recovery from total disability. This ensures that being active in a rehabilitation or therapy program will not reduce or eliminate benefits. -The other part of the rehabilitation benefit will pay some or all of the costs of the ...

Recurrent Disability This provision protects individuals who return to work, but become disabled again from the same or a related cause. If this situation occurs within a certain period of time, the insured is considered still disabled from the original disability and is not subject to a new elimination period. The recurrent disability provision encourages people to return to work without the fear of losing benefits if the disability continues. This clause stipulates that a worker can skip the mandatory elimination period if they experience the same or a related disability within six months of returning to work after a medical leave due to a prior disability. Recurrent disability clauses allows the insured to continue receiving their original disability benefits without a break in their payments. Recurrent disability provisions have time limits, and these time limits vary from policy to policy. If the disability recurs after the time limit, the claimant must file a new claim ...

Presumptive Total Disability Presumptive disabilities are medical conditions that qualify for disability benefits and can be easily identified or “presumed.” The grounds for presumptive total disability, a total and permanent loss because of injury or illness, can be defined as one of the following: *Loss of speech; *Loss of hearing in both ears, not restorable by hearing aids; *Loss of sight in both eyes - This means that both eyes must measure at or below 20/200 after efforts have been made to correct vision; *Loss of use of both hands; *Loss of use of both feet; or *Loss of use of one hand and one foot. Benefits are payable until you are able to return to work or until you reach your Maximum Benefit Period (based on the age you become disabled) or based on the condition causing your disability. Examples of disabling conditions that may qualify you for Presumptive Disability include total deafness, total blindness, amputation of the leg at the hip, confinement to bed or a w...

Premium Mode The premium payment frequency selected by the insured. Most insurance companies offer annual, semi-annual, quarterly or monthly payment modes. It is important to know that a premium is the periodic payment required to keep an insurance policy in effect. The insured decides on the schedule upon purchasing a policy. The insured is billed according to this schedule, and some insurers allow the insured to change the schedule. The monthly option may be slightly higher than semi-annual premiums because additional expenses are incurred. Besides the frequency with which you make life insurance payments, mode of premium also determines how you make payments, such as by check or digital payment methods. More frequent modes (monthly) of premium payment usually cost less per payment as compare to less frequent say twice a year. In conclusion, the premium mode you choose determines how often you pay your insurance premiums. Consider your budget, cash flow preferences, and pot...

Pre-Existing Conditions A medical illness or injury that you have before you start a new health care plan may be considered a “pre-existing condition.” Conditions like diabetes, COPD, cancer, and sleep apnea, may be examples of pre-existing health conditions. They tend to be chronic or long-term. Pre-existing conditions are often defined as any mental or physical condition for which: 1-The insured has consulted a physician; or 2-The insured has received medical treatment or services; or 3-The insured has taken prescribed drugs or medications; or 4-A condition for which a reasonably prudent person would have sought medical advice, care or treatment. Pre-existing conditions are taken into account at the underwriting stage and affect the disability policy conditions. The pre-existing condition exclusion period is a health insurance provision that limits or excludes benefits for a period of time. The determination is based on the policyholder having a medical condition prior to enr...

Pre-Disability Earnings Pre-disability earnings are the amount of qualifying income that a disability insurance policyholder was earning before an injury. Pre-disability earnings are used to calculate how much disability income a policyholder will qualify for in the case of an injury. Disability income insurance is intended for helping people replace a portion of their income if they become injured for an extended period. The plans pay policyholders a percentage of their pre-disability earnings. The percentage range is determined by the applicable law. Some of the factors that affect the cost of disability insurance include: Age: The minimum age of an applicant is 18 years. The maximum age is typically 60. The older an applicant is, the higher the final premium. Gender: The rates for female applicants per unit coverage are higher than the rates for men. Health: Smokers can pay as much as 25% more than non-smokers for the same protection. Pre-disability earnings must be verified,...