Disability insurance provides income protection for hard working Americans. As a broker, it is your task to help your clients understand how vital it is to have disability insurance. When you have disability income conversations, make sure you simplify basic terms and definitions for your client. Don’t assume that certain aspects of coverage are obvious.

Breaking down key terms and definitions can help to ensure that your client understands disability income protection. A clear explanation can help make your clients feel comfortable, which can help them be more receptive to protecting their income with disability insurance. When it comes to discussing terms with potential clients, make sure you explain these terms.

Types of Disability Insurance

Although you are marketing individual disability insurance, your clients may not realize that they qualify for group disability insurance, or they may not understand the pros and cons of long-term versus short-term disability insurance. Many think that they will easily qualify for Social Security Disability if they become to sick or injured to work.  It is beneficial to break down the different types of disability insurance and the role each plays in the event of a disabling injury or sickness:

· Short-Term Disability. STD provides coverage for a short amount of time, typically just a few months. This type of policy rarely goes beyond a year.

· Social Security Disability Insurance. SSDI is part of social security benefits. This type of coverage can be harder to qualify for and many have to apply several times to receive benefits. Benefits are also lower than other forms of disability insurance. It is important to highlight to your client why individual disability insurance is the best income protection.

· Individual Disability Insurance. This is a disability income policy purchased by the individual and it’s portable.  This means that even if a person changes careers, they may be able to keep the same policy, benefit and premium.

· Group Disability Insurance. This type of disability insurance is typically provided through an employer. Since it is a group rate, premiums can be more affordable than individual policies. However, if an individual leaves the company, they may lose coverage.

What Is the Definition of Disability?

The definition of disability is the most important aspect of the policy. It triggers the claim. Make sure your clients understands the different definitions of disability available.  This helps them to select the best policy for their individual situations.

Here are the most common definitions:

Own occupation
Due to sickness or injury you are unable to perform the material and substantial duties of your occupation. Benefits will be paid to claimant even if he/she returns back to work in another occupation.

This is the strongest definition of disability available. It is the definition many physicians and attorneys seek because it protects them in their specialties, yet would allow them to work in the field in another capacity or specialty.

Modified own occupation
Due to sickness or injury you are unable to perform the material and substantial duties of your occupation, and you are not gainfully employed in any other occupation.

This is a quality definition for those not employed in highly specialized fields. It will protect the claimant in his/her occupation, but not if working in another occupation.

Transitional own occupation
Own occupation definition that includes a benefit reduction provision in the event claimant is working in another occupation. Disability benefit will be determined based on the ratio of claimant’s monthly earnings prior to claim to the claimant’s earnings at a different occupation and claimant’s monthly disability payments.

Any reasonable occupation
Due to sickness and injury you are unable to perform the material and substantial duties of your occupation and any reasonable occupation based on your training, experience and education.

Make sure you know everything you need to become a trusted resource for your clients, making sure they choose the best disability contract for their situation. Review terms and definitions .

For more information or questions, contact Steve Crowe at ext. 222.