What factors are most important in disability insurance?

Submitted by Anonymous (not verified) on Tue, 04/02/2013 - 00:50

It would be great if someone could tell me about disability insurance policy features. I mean what factors of disability insurance for individuals should I consider if I’m going to get one?

If I buy a policy on my own for $5000/ month and then later join a firm that has 60% benefit, do I collect both if I become disabled?

Posted: 04 Apr 2013 02:13 Post Subject:

You should obtain a policy described as "occupational", which covers any form of listed disability sustained, whether it occurs during the course of your employment or while "off duty". The definition of disability needs to be defined as "own occupation" (not "any occupation").

As for dual coverage, that depends on the language of each contract. Some policies' benefits are "coordinated" with other disability benefits, which could be workers' compensation, Social Security disability, or another disability income policy. You have to read the language of each policy to know for sure.

The employer-sponsored policy might be more likely to include such coordinating/limiting language compared to a policy obtained privately.

Posted: 04 Apr 2013 10:50 Post Subject:

I don't have a clue what "occupational" means. I think that Max may be making up his own terminology.

If you buy a non cancellable guaranteed renewable policy from any of the companies that specialize in the white collar market, your group policy will have no impact on your individual policy.

Posted: 05 Apr 2013 01:02 Post Subject:

You can't be serious! There are "occupational" and "nonoccupational" disability policies. A nonoccupational policy ONLY provides protection for disability that occurs off the job.

[Health insurance is a form of nonoccupational disability insurance for persons who are employee, because workers' compensation laws put all the burden of medical expenses on the employer.]

An occupational disability income policy would pay claims for any disabling event, on or off the job. It is the kind of policy any self-employed person or specialized employee would need.

If you don't believe this, simply read any textbook on disability insurance,. You can read, can't you?

Posted: 05 Apr 2013 07:49 Post Subject:

He isn't buying a policy from a textbook. That is your problem, isn't it? Your knowledge comes from a textbook and not from real world experience. Of course he needs a policy that covers himself for on and off the job disabilities. The policy, however, won't describe itself as "occupational". It is what all employees who need coverage need.

I have been doing this for a long time and I have never seen a non-occupational DI policy. Can you name one major seller of DI that actually sells one or is this just a textbook thing?

Health insurance is non- occupational? It may only pay what worker's comp doesn't pay, but that isn't the same as being non-occupational.

Posted: 05 Apr 2013 01:41 Post Subject:

The courts have something to say about it, too:

Non-occupational disability means a non-occupational sickness or condition that results from injury or disease that is not job related. Non-occupational disability makes a person unfit to perform the material duties of regular job functions. It is to be noted that Rhode Island, California, New Jersey, New York, and Hawaii requires employers to pay income (not medical expense) benefits if a worker is disabled by illness or injury that did not occur at work. For a plaintiff to recover non-occupational disability income benefits he must establish that he is unable to engage in any and all conceivable gainful occupations for which he is reasonably fit by reason of education, training or experience, that such inability is a result of injury or illness, and that his medical condition requires a continuous course of treatment by a physician.[ Papczynski v. Connecticut General Life Ins. Co., 730 F. Supp. 410 (D. Fla. 1990)]

And so does Social Security:

Temporary disability insurance, sometimes referred to as cash sickness benefits, provides workers with partial compensation for loss of wages caused by temporary nonoccupational disability. Only five States, Puerto Rico, and the railroad industry have temporary disability insurance laws.

Posted: 05 Apr 2013 03:07 Post Subject:

That's nice, Max. What does any of that have to do with the OP buying individual disability coverage?

Posted: 08 Apr 2013 01:21 Post Subject:

No response, Max?

Posted: 14 Apr 2013 05:36 Post Subject:

Yeah in the IDI (individual disability insurance) market place where someone who is potentially a lawyer, all of the players are going to have products that are "occupational" contracts.

No one in the IDI market uses that term because they don't deal in disability contracts that would be anything but.

The own occ definition of disability is sound advice. But there are variances. There's pure own occ, which provides benefits even if you can work doing something else. and modified own occ which means if you can work somewhere else, you must choose not to in order to receive benefits.

Non-can guaranteed renewable are also contract specifics to ensure you have.

You would collect on both policies if you later joined a firm that had a group LTD benefit, even though that total benefit may exceed what you'd be able to buy after you became employed and a part of that plan.

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