Disability Income Insurance and Disability Benefit Programs

1
Chapter 15

• Disability Income Insurance and Disability
  Benefit Programs

2
Disability Income Insurance

• A form of health insurance providing periodic
  payments under certain conditions when the
  injured is unable to work because of illness
  disease or injury
• not as a result of a work related accident or
  condition

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Available from

• Private Insurance Co. (Individual Policies)
• Employer Sponsored Plan (Group Policies)
• Federal Disability Programs

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Individual policy

• Weekly or monthly income
• Do not provide medical expense benefits
• Cannot be work related illness or injury
• Very important for the self-employed

5
Individual Policy

• Waiting period for benefits to begin
• The benefit period is the amount of time benefits
  will be paid

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Benefits

• Residual benefits- partial benefit when the
  insured is not totally disabled
• Supplemental benefits- Provisions that will
  increase monthly indemnity (future purchase cost
  of living adjustment)
• Accidental Death and Dismemberment Benefits-
  double indemnity loss of sight or limb

7
Group Policy

• Premiums are paid by employer with or without
  contributions from the employee
• Short term policies (13 weeks- 24 months) and
  Long term policies (to age 65)
• Benefits cease when the employee returns to work
  even part-time

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Federal Disability Programs

• Workers compensation
• Social Security Disability Insurance
• Supplemental Security Income (SSI)
• Civil Service Retirement System
• Federal Employees Retirement System
• Armed Services Disability
• Veteran Affairs Disability Program

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SSDI and SSI

• Managed by the Social Security Administration
• Pay monthly benefits to people younger than 65
  who cannot work for at least one year because of
  severe disability
• Eligibility- See page 471