From the course: Risk Management and Insurance Planning: Designing for Client Needs
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How insurance companies define disability
From the course: Risk Management and Insurance Planning: Designing for Client Needs
How insurance companies define disability
Disability insurance has some very specific language, and I'm going to go over the key terms here, but there is a far more robust handbook of terms in your downloadable materials. Make sure to look through it at the end of this chapter. The first thing we need to understand is the definition of disability, because insurance companies define this differently than you're likely used to in everyday language. In the world of disability insurance, there are two key definitions, short-term and long-term. Short-term disability is straightforward. The person cannot perform the core duties of their present role due to an illness or an injury. Informally, it means that they can't do today what they were paid to do yesterday. But people who are faced with short-term disability are expected to eventually return to their existing job. However, with longer-lasting disabilities, there is more than one definition. The two most common, and the ones we'll focus on, are own occupation and any…
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