Disability insurance is a policy that provides a recurring benefit amount when an insured is unable to work due to a disability. The purpose of the insurance is to protect you if an accident or illness prevents you from earning an income in your occupation.
Insurance carriers calculate a percentage of your gross earnings. Each insurer has different Issue and Participation limits – meaning they will cover a certain percentage less any other individual disability insurance you have in force. Generally, they will cover anywhere from 45-65% of total earnings up a maximum amount of $15,000 a month from all in force individual policies.
A non-cancelable (Non-Can) policy is one where once the policy is issued, the benefit and premium remain the same to age 65. The carrier cannot cancel the policy and cannot increase the premium as long as the premium is paid when due.
You will receive a benefit if you are not totally disabled but, due to sickness or injury, you lose time in your occupation or are unable to perform one or more of your material and substantial duties, and are under a physician's care. At the end of your elimination period, you must be experiencing a loss of earnings of at least 20% of prior earnings in your occupation in order to receive benefits.
Pre-existing condition means a sickness or physical condition for which, prior to the effective date: (1) symptoms existed that would cause an ordinarily prudent person to seek advice or treatment from a physician; or (2) advice or treatment was recommended by or received from a physician.
PHI may be required due to cause. An interviewer trained by the insurance carrier will call the Proposed Insured to verify information on the application, collect missing details, and provide supplemental information. The underwriter will order the interview if required after reviewing the application.