What is the structure of a Disability Insurance Policy?

• Benefit Payment – benefits are almost always payable on a monthly basis, while the disability continues.  Upon recovery from a disability, the policy continues.  Benefits could potentially be payable again for a subsequent disabilities or for the recurrence of a prior claim.
• Waiting Period (elimination period) – is the length of time after the start of a disability before the benefits become payable.  The waiting period can range from 30 days up to 730 days (two years).  The traditional disability insurance waiting periods are 30, 60, 90, 120, 180, 365 and 730 days.   The longer the waiting period the lower the premium for the policy.
• Benefit Period- Is the period for which the benefits are payable during disability.  The maximum benefit period is selected at the time the policy is applied for.  The traditional benefit periods offered are:
  • 24 months
  • 60 months
  • To age 65

  The To age 65 benefit period is the minimum benefit period that truly covers the catastrophic long-term disability risk.