Why There Are Different Definitions of Disability for Insurance
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Why Are There Different Definitions of Disability for Insurance Purposes?
Disability insurance programs are highly dependent on a specific definition of total disability to determine an insured's ability to receive disability income benefits. There are a number of “categories” of disability definitions that are commonly used.
- Total disability. This condition results in the inability to perform the duties of one's occupation. This definition may have the following additional clarifications.
- Total temporary disability. This defines your current disability as total, but from which, you should recover at some point in the future.
- Total permanent disability. A disability classified as total AND permanent indicates that disability benefits will be payable up to the maximum term specified in the contract.
- Partial disability. This condition is often defined as “ disability that prevents individuals from performing one or more functions of their occupation, but does not impair their capability of performing less demanding employment.” Depending on the specific language in your disability insurance contract, you may or may not be eligible for benefits. Depending on your condition, you could also fall into a category of temporary partial disability or permanent partial disability.
Along with accurate classifications of disability, the insurance definition of disability can be very important to you. Many disability insurance policies contain language stating that you are disabled until you can perform the duties of “any gainful occupation”.
While this language does not cause a serious problem for the majority of people, highly skilled professionals often face a decision moment with this language.
Most medical, legal, and other professionals are better served adding “own occupation" coverage to their disability insurance program. This definition means that you'd be eligible for disability income benefits until you've recovered sufficiently to perform the duties of your professional specialty, not just any occupation.
As you can see, the definition of total disability or partial disability is one of the most important components of a disability income insurance policy.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.