CFP

Disability Insurance - Provisions of Disability Income Insurance

With all disability policies there are various benefits that are standard with particular insurers and other features that can be added to the policy to fit the client's particular needs. Some of these additional features will add further costs to the overall premium of the policy, they are known as "riders".

Noncancelable
The insurance company cannot cancel the policy except in such cases when the premium is not paid. This policy can be renewed every year and the insurance company cannot make certain amendments such as increase in premium amounts or reducing the benefits.

Guaranteed Renewable Disability
These contracts guarantee that the individual can keep the policy in force by paying the stated premium in the policy. The premium may only be increased on a class basis not on an individual basis.

Conditionally Renewable
A policy will be in effect up until the age specified in the policy as long as premiums are paid in full; however, a provision may be added that allows a non-cancellable or guaranteed renewable policy to continue beyond age 65 at the discretion of the insurance company and at a new premium amount determined by the insurer.

Presumptive Disability
Most policies today contain a presumption of disability provision. Under this provision, the policy will provide that full disability benefits be paid if the insured loses his or her sight, hearing, speech, both hands, both feet, or one hand and one foot.


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