Accumulation Period

A period of time in which you may accumulate your missed days of work prior to becoming eligible to receive disability benefits. 

Activities of Daily Living

Dressing – Toileting – Transferring – Continence – Eating – Bathing.


Your age on your last birthday.

Any Occupation Definition

For the length of the benefit period if due to sickness or injury your inability to work in any reasonable occupation for which you are fit to do based on your education, training, or experience.

Automatic Increase Rider

It allows for automatic increases in benefit without having to prove medical or financial insurability.

Base Monthly Benefit

The amount of money you are eligible to receive from your policy under the terms of your policy for each month you are disabled.

Benefit Periods

The length of time the carrier is obligated to pay your benefit to you.  2 years, 5 years, 10 years, Age 65, Age 67, Age 70, Lifetime.

Business Expense

This means the regular business expenses which may be deducted from gross earned income for the period income is being determined.  

Catastrophic Disability

Provides additional benefit in combination with your base monthly benefit for any disability that prevents you from performing at least 2 out of the sick activities of daily living. 

Claim Forms

Forms that needed to be completed from the carrier by the insured once a disability has been reported.  Carriers normally provide these forms within 15 days of receiving notice of disability. 

Cobra Premium Benefit

A reimbursement during a disability for the cost of COBRA insurance if your disability results in unemployment where COBRA is provided. 

Concurrent Disabilities

When total disability is caused by more than one sickness or injury.

Cosmetic or Transplant Surgery

A rider that provides coverage for any disability resulting from cosmetic or transplant surgery.

Cost of Living Rider (COLA)

It provides for an increase in your base monthly benefit after every 12 months of consecutive disability-based either on a set interest amount or an average of the CPI-U.


Benefits available under your policy.


Consumer Price Index for all urban consumers which are published by the US Department of Labor.  

Current Income

It means all income for each month during a period of disability.  


Any sickness or injury that prevents you from maintaining your income or prevents you from performing some or all of the duties of your occupation. 


Some carriers offer dividends and they are calculated on divisible surplus if any.  They are either paid in cash or used as a credit to premium payments. 


A licensed physician, other than the insured or owner, parent, spouse, child of the insured or Owner, acting within the scope of his/her license.

Doctors Care

A doctor which, under prevailing medical standards, is appropriate for the condition causing the disability. This requirement is waived if the carrier receives written proof that further Doctor’s Care is no longer of benefit to the insured. 


All functions that you were performing before the onset of a disability. 

Elimination Period

The period of time you must be totally disabled before the carrier starts paying benefits.


Medical or lifestyle conditions that are sometimes excluded from your policy before you start paying premiums. 

Expiration Date

The date in which your coverage ends.

Full Time

Working the equivalent of 30 hours per week.

Future Increase Option

A benefit that allows for guaranteed medical insurability should the insured wish to increase his/her policy in the future.  Financial insurability is required.

Gainfully Employed

Actively at work or engaged in activities for income, remuneration, or profit. 

Good Health Benefit

The elimination period is reduced by two days per year that you are not receiving any monthly disability benefits. 

Governing Law

Any provision within the state statutes where the insured resides. 

Grace Period

Each premium after the due date must be paid within 30 – 31 days to keep the policy in force.  The policy remains in force during the grace period. 

Graded Life Time Indemnity

Graded Lifetime Total Disability where benefits are paid for life.

Graded Premium

Premiums increase annually at guaranteed amounts usually until the policy anniversary following age 60.

Guaranteed Renewable

You can renew your policy until the Expiration Date.  The carrier cannot cancel or change the terms of your policy but the premiums are not guaranteed. 


An institution licensed by law as a facility that provides in-patient medical care is staffed by physicians and provides services by registered nurses 24 hours a day.


Premiums have been paid when due and you remain insured under the terms of the policy.


The compensation you receive or which attributes to you for work or personal services after business expenses.


Any accidental bodily harm caused by a singular and distinct event occurring while your policy is in force.

Issue Age

Your age at the time of the policy date.

Issue Date

The date coverage begins.


Premium is in default and you are no longer insured under your policy.

Limitations of Coverage While outside of the United States

Most carriers require that you live full time in the United States, the District of Columbia, or Canada in order to receive benefits under your policy.  Some carriers will allow you to reside outside the United States so long as you remain under the care of a US Doctor. 


Any Injury, Sickness, or Disability that occurs while your policy is in force upon which a claim is based.

Loss of Income

The difference between your prior earned income and your current income.  This difference will be considered a loss of income to the extent it is solely the result of the injury or sickness that caused your disability.

Loss Payee

The person to whom benefits will be paid.

Material and Substantial Duties

The duties you are normally required to perform for your Regular Occupation and cannot be reasonably omitted or changed.

Maximum Benefit Period

The maximum length of time a carrier will pay you your base monthly benefit as long as you are totally disabled.

Mental Nervous Disorders

Any disorder excluding dimensia resulting from stroke, trauma, infections or degenerative diseases, such as Alzheimer’s disease classified in the Diagnostic and Statistical Manual of Mental Disorders (DSM), published by the American Psychiatric Association, most current as of the start of the period of disability.  Such disorders include but are not limited to psychotic, emotional, or behavioral disorders, or disorders relatable to stress or to substance abuse or dependancy.  If the DSM is discontinued or replaced, these disorders will be those classified in the diagnostic manual then in use by the American Psychiatric Association as of the start of the period of disability.

Military Duty

Some carriers allow for the suspension of coverage while in the Military.  No policy covers a disability-related to an Act of War.  If on active duty and you continue your disability policy some carriers may cover for non-war related disabilities that are not covered by the military.

Modified/Transitional Own Occupation

If due to sickness or injury your inability to work in your own occupation and you are not working or engaged in any other occupation for wage or profit.

Monthly Benefit

Base monthly benefit or residual monthly benefit as defined in your policy.

Monthly Indemnity

The amount the carrier will pay for each month of Total Disability.

Non-Disabling Injury

Some carriers will reimburse you for medical expenses that related to an injury that does not result in Total Disabiltiy.


You can renew a Non-Cancellable policy each Policy Year until the Expiration Date.  During this time, the carrier cannot cancel or change the terms of your policy and your premiums are guaranteed.

Non-Participating Policy

No Dividends are paid under this policy.

Normal and Usual Business Expenses

Expenses that can be deducted that are incurred on a regular basis and are essential to the operation of the business.

Notice of Claim

A written notice describing the insured’s disability that must be sent within 20 days the Disability occurs or as soon as reasonably possible.

Occupational Class

The rate class assigned to your occupation at the time you apply for disability benefits that are used by the carrier to determine their internal rate for risk.

Own Specialty/Own Occupation Definition of Total Disability

If due to sickness or injury you are prevented from performing the Material and Substantial Duties of Your Regular Occupation.  You are still considered Totally Disabled even if you are working in another occupation.


This means you, the insured unless the records show otherwise.

Partial Disability

A disability suffered in your current occupation where a loss of income of at least 15 – 20% is incurred and you are under the care of a Doctor.  

Participating Policy

A policy that provides dividends to its policyholders.


A Physician other than yourself or a family member who is licensed to treat your injury or sickness. 


A legal contract between the insured and the insurer.  

Policy Anniversary

The yearly anniversary of the policy date while the policy remains in force.

Policy Date

The date from which policy anniversaries, policy years, and premiums due dates are determined.

Pre-Existing Condition

Pre-existing conditions are covered so long as they are fully disclosed during the application process and they were not specifically excluded prior to issuing your contract.

Presumptive Total Disability

When a sickness or injury causes a permanent loss where the waiting/elimination periods can be waived.  

Prior Income

Your average monthly income for either the last 12 to 24 calendar months just prior to the date you became disabled.


Records and statements.

Recurrent Disabilities

A disability that starts less than 2 months after a period of disability ends.  No new waiting period is required.


You will not be considered recovered from a Total Disability just because you participate in a program of occupational rehabilitation.


May include a new application and underwriting requirement and requires a back payment of missed premium payments.  New exclusions or endorsements can be added during reinstatement. 


After the benefit period, the policy can be conditionally renewable at attained age premiums.

Residual Disability or Residually Disabled

You are not totally disabled and you are working in your regular occupation and you have a loss of earnings of at least 20% after you’ve satisfied your elimination period. 

Residual Monthly Benefit

The benefit amount to be paid each month you are Resdiaully disabled after the elimination period. 


A summary of your benefits and premiums provided to you with your policy.


An illness or disease that manifests while the policy is in force which includes complications to pregnancy or childbirth so long it was not previously excluded.

Step Premiums

Normally guarantees that a premiums normally only guarantee the premiums and remain level for 5 years or until an insured’s age of 35, whichever is later.

Survivor Benefit

Benefit paid to your beneficiaries or estate if you die while collecting disability benefits.  Normally 3 months of your Base Monthly benefit are paid to your survivors. 

Suspension Period

A period of time where the policy may not be enforced.

Termination Date

The date the policy terminates.

Total Disability or Totally Disabled

The definition that describes when a carrier sis obligated to pay your full monthly benefit. 

Unearned Income

May include investment income, Rent, deferred compensation plans, retirement income, pensions, other disability benefits or royalties.  

Voluntary Suspension During Unemployment

The ability to suspend your policy during brief periods of unemployment and allow you to resume again when full-time work is re-established.  No coverage is provided during this period. 

Waiting Period

The period of time you must be totally disabled before a carrier starts paying benefits. 

Waiver of Premium

Premium payments are waived upon approval of your claim, after you have been disabled for at least 90 days. 

We, Our, Us

Referring to the insurance carrier.

Written Request

A request in writing in a form satisfactory to the insurance company and received at their home office.

You, Your

Referring to the insured, you.

Your Occupation

The insured’s regular profession(s) or Business(es) at the start of Disability.

Your Regular Occupation

The occupation or occupations in which you are regularly engaged at the time disability begins. 

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