Glossary of Terms
LTD: Long Term Disability. Refer to Disability Benefits section for the definition.
Total disability: Disability plans have two different definitions for LTD:
- Own Occupation: When an individual is unable to perform his own occupation.
- Any Suitable Occupation: When an individual is unable to perform any occupation which he should have been able to perform based on his training and education. Individuals holding policies with such definition will find it more difficult to be eligible for benefits than the ones who are covered under Own Occupation.
Elimination period: It is a lag period between the time the disability occurs and the time the benefits start to be paid. The standard period is 90 days, the shorter the period the higher the premium. If you have no means of income in the immediate period following a disabaling injury you should buy the policy with the shortest Elimination Period.
Benefits: The amount of the benefit may be a percentage of the salary with a maximum monthly benefit or may be a flat monthly amount regardless of the salary.
Offsets: Are defined as any other payments that the disabled receive. Those offsets will limit the benefits paid by the LTD policy. Individual policy benefits are not offset by any othe rincome.
Minimum and Maximum Monthly Benefits: There is a minimum amount that the policy has to pay reagdless of offsets. There is also a maximum benefit period that should be described in the policy. The typical stop period is age 65.
LTD policy exclusions:
- Mental disability is usually covered for a limited period.
- Preexisting conditions are not covered by new LTD policies.
- Injuries related to war, to commission of a felony, to work,to illecit drug use and self inflicted injuries.