Oregon Insurance Terms: Disability
Benefit or maximum period: This
is the length of time benefits from your Oregon insurance company/agent would be paid for a disability.
The longer the maximum period, the higher the premium.
Benefit amount : The benefit
amount is based on the income being earned at the time
of purchase. Most policies from agents or Oregon insurance companies limit benefits (from all
sources) to no more than 70 to 80 percent of monthly
income, so there is an incentive to return to work.
Generally, people with lower incomes will receive a
higher percentage of their pre-disability income than
higher paid workers receive.
Future purchase or guaranteed purchase option
option allows you to increase coverage through your Oregon insurance company as your income
increases. It can be an important feature if income
is likely to rise. Check with your Oregon insurance company.
Guaranteed renewable or non cancelable policies
guaranteed renewable policy guarantees to provide
coverage as long as you continue to pay premiums. The
premium cost could increase with this type of policy.
A non cancelable policy guarantees to provide
coverage if you pay the premium, and also guarantees
that the premium will not increase.
Indexed disability income benefits or cost-of-living
adjustments (COLA): After
a year of disability, indexing or COLA adjustments may
help to make your benefit payments "inflation proof."
Indexing will adjust the monthly benefit amount based
on the Consumer Price Index or by a specified percentage.
Partial or residual disability benefits : Partial
disability benefits usually pay a set amount for a set
period of time. For example, your DI policy states you
will be paid by your Oregon insurance company half of the monthly benefit for six months
if you should be injured or sick and meet the definition
of total disability. Residual benefits usually allow
for payments that are proportional to the loss of income
if you're injured or sick and are unable to work, but
have a loss of earnings. Some policies require total
disability for a period of time before residual or partial
benefits would be paid.
Total disability : Some
policies define total disability as the inability of
the insured to perform any work for which he/she is
qualified. Other policies will define total disability
as the inability of the insured to perform the duties
of his or her own occupation. Some policies may change
occupation definitions after a specified period of disability. Check with your Oregon insurance agent/company.
Waiting period or elimination period : This
is a period of time after disability occurs for which
you will not receive benefits. Select a waiting period
based on the maximum length of time you will be able
to meet your expenses with short-term savings. The shorter
the waiting period, the higher the premium.
Waiver of premium : Many
Oregon insurance companies offer a benefit that allows you to discontinue
premium payments during disability.
These are some of the many features available in the disability
income insurance industry today. You will want to work
closely with an Oregon insurance representative to tailor a
disability income insurance plan that meets your needs.