Disability Insurance Products and Principles

Course Description:

The text focuses primarily on disability income insurance although business-related disability products, such as disability buyout and business overhead expense policies, are also examined. Students are introduced to the various definitions of disability—own occupation, any occupation, etc.—that are used by insurers, as well as the important differences between the principal renewability provisions. Disability rider benefits are considered, including those benefits provided by the Social Insurance Benefits rider, the Purchase Option rider and the Return of Premium rider. Financial and medical disability insurance underwriting is discussed, and the use of occupational classification is explained. The important sources of disability income benefits are considered; including those provided by federal and state government programs, employer-related plans and individually purchased policies. The tax treatment of disability premiums and benefits is explained.

Learning Objectives:

Upon successful completion of this course, participants will be able to:

·         Explain the relative likelihood of disability and its relationship to an individual’s age, occupation and lifestyle;

·         Describe the traditional sources of income available to a disabled individual;

·         Discuss the important disability insurance policy provisions relating to renewability;

·         Explain the important differences between own occupation, limited own occupation, and any occupation definitions of total disability

·         Describe how partial, residual and recurrent disability provisions affect an insured’s disability insurance coverage;

·         Identify the principal disability benefits provided by rider and explain their operation;

·         Explain the fundamentals of disability insurance underwriting;

·         Illustrate the coverage provided under business-related disability insurance products; and

·         Discuss the federal income tax treatment given to various disability insurance premiums and benefits.