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Disability Insurance Basics
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Cost of Living Adjustment (COLA)
A feature of some disability insurance policies that increases benefits over time based on inflation or another measure to help the benefits keep pace with the cost of living.
Long-Term Disability (LTD) Insurance
Insurance that pays a percentage of your salary after you have been disabled for a certain period, typically covering longer periods such as 5 years, up to retirement age.
Waiting (Elimination) Period
The time period between the onset of a disability and when you start receiving benefits. It's effectively a deductible period of time.
Short-Term Disability (STD) Insurance
A type of disability insurance that covers a portion of the insured's salary for a short period, usually 3 to 6 months.
Definition of Disability Insurance
A type of insurance that provides income in the event that a worker is unable to perform their work and earn money due to a disability.
Own-Occupation Disability Insurance
A policy that pays benefits if you are unable to perform the duties of your specific occupation, regardless of whether you can work in a different job.
Residual Benefit
A feature in disability insurance policies that provides benefits to individuals who can still work but have reduced earnings due to their disability.
Benefit Period
The length of time during which a disability insurance policy will pay benefits after the waiting period has ended.
Any-Occupation Disability Insurance
A policy that only pays benefits if you are unable to work in any job suitable to your education and experience.
Rider
An optional provision that can be added to a standard insurance policy to provide additional benefits or coverage.
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