So who decides if you are disabled? Your insurance company does of course. Therefore you need to pay special attention to the details in your policy. By reviewing this list of definitions you will be able to better understand your disability insurance policy.
Own Occupation: This means you are disabled and cannot perform the regular duties of your usual job, even if you could do some other job.
Any Occupation: You are considered disabled if you cannot work at any job that you are currently qualified for by training, education and experience.
Total Disability: You are disabled and unable to work at any job.
You might want to consider adding the following provisions to your disability insurance policy:
Cost of Living Adjustment: This will increase the amount of disability payments you receive with inflation up to a maximum rate that is preselected, usually from 4 to 10 percent. This benefit will continue to increase every year. This is a very important benefit to have, especially if you are younger.
Automatic Increase: This will allow for a total benefit increase of 20 to 25 percent over the first three to five years of the policy. Your premiums will cost more with this benefit.
Future Increase Option: If you only qualify for a low amount of disability coverage but expect to make lots more money later in your career you should choose this option. You will be able to increase your coverage later, regardless of your health.
Residual Benefit: This benefit will allow you to return to work part time and still receive a portion of your benefits.
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