Vision insurance

Vision insurance is a form of insurance that provides coverage for the services rendered by eye care professionals such as ophthalmologists and optometrists. There are many vision insurance companies. The typical vision insurance plan provides yearly coverage for eye examinations and partial or full coverage eyeglasses, sunglasses, and contact lenses, with or without copays, depending on the plan chosen.

Long term care insurance

Long-term care insurance (LTC or LTCI), an insurance product sold in the United States, United Kingdom and Canada, helps provide for the cost of long-term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.
Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.
Age is not a determining factor in needing long-term care. About 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime.^[1] About 40% of those receiving long-term care today are between 18 and 64. Once a change of health occurs long-term care insurance may not be available. Early onset (before age 65) Alzheimer's and Parkinson's disease are rare but do occur.

Benefits

Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to 7 days a week, 24 hours a day (up to the policy benefit maximum).
Other benefits of long-term care insurance:

• Many individuals may feel uncomfortable relying on their children or family members for support, and find that long-term care insurance could help cover out-of-pocket expenses. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
• Premiums paid on a long-term care insurance product may be eligible for an income tax deduction. The amount of the deduction depends on the age of the covered person.^[2] Benefits paid from a long-term care contract are generally excluded from income.
• Business deductions of premiums are determined by the type of business. Generally corporations paying premiums for an employee are 100% deductible if not included in employee's taxable income.^[3]

In the United States, Medicaid provides some of the benefits of long term care insurance. A welfare program, Medicaid does provide medically necessary services for people with limited resources who "need nursing home care but can stay at home with special community care services."^[4] However, Medicaid generally does not cover long-term care provided in a home setting or for assisted living. People who need long-term care often prefer care in the home or in a private room in an assisted living facility.

Types of policies

Private long-term care (LTC) insurance is growing in popularity in the United States. Premiums, however, have risen dramatically in recent years even for existing policy holders.^[5] Coverage costs can be expensive, especially when consumers wait until retirement age to purchase LTC coverage.^[6]
As they relate to U.S. income tax, two types of long term care policies offered are

• Tax qualified (TQ) policies are the most common policies offered. A TQ policy requires that a person 1) be expected to require care for at least 90 days, and be unable to perform 2 or more activities of daily living (eating, dressing, bathing, transferring, toileting, continence) without substantial assistance (hands on or standby); or 2) for at least 90 days, need substantial assistance due to a severe cognitive impairment. In either case a doctor must provide a plan of care. Benefits from a TQ policy are non-taxable.

• Non-tax qualified (NTQ) was formerly called traditional long term care insurance. It often includes a "trigger" called a "medical necessity" trigger. This means that the patient's own doctor, or that doctor in conjunction with someone from the insurance company, can state that the patient needs care for any medical reason and the policy will pay. NTQ policies include walking as an activity of daily living and usually only require the inability to perform 1 or more activity of daily living. The Treasury Department has not clarified the status of benefits received under a non-qualified long-term care insurance plan. Therefore, the taxability of these benefits is open to further interpretation. This means that it is possible that individuals who receive benefits under a non-qualified long-term care insurance policy risk facing a large tax bill for these benefits.

Fewer non-tax qualified policies are available for sale.^[7] One reason is that consumers want to be eligible for the tax deductions available when buying a tax-qualified policy. The tax issues can be more complex than the issue of deductions alone, and it is advisable to seek good counsel on all the pros and cons of a tax-qualified policy versus a non-tax-qualified policy, since the benefit triggers on a good non-tax-qualified policy are better.^[7] By law, tax-qualified policies carry restrictions on when the policy holder can receive benefits. One survey found that sixty-five percent of purchasers did not know whether or not the policy they bought was tax qualified.^[6]
Once a person purchases a policy, the language cannot be changed by the insurance company, and the policy usually is guaranteed renewable for life. It can never be canceled by the insurance company for health reasons, but can be canceled for non-payment.
Most benefits are paid on a reimbursement basis and a few companies offer per-diem benefits at a higher rate. Most policies cover care only in the continental United States. Policies that cover care in select foreign countries usually only cover nursing care and do so at a rated benefit.
Group policies may have provisions for non-restricted or open enrollment periods and underwriting may be required. Group plans may or may not be guaranteed renewable or tax qualified. Some group plans include language allowing the insurance company to replace the policy with a similar policy and to change the premiums at that time. Some group plans can be canceled by the insurance company. To compensate for the higher insurance risk group plans may have higher deductibles and lower benefits than individual plans.Some group plans have a 3 ADL (activities of daily living) requirement for nursing care.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.^[8]
Retirement systems such as CalPERS may offer long-term care insurance similar to a group plan. These organizations are not regulated by the state insurance departments. They can increase rates and make changes to policies without state scrutiny and approval.
Long-term care insurance rates are determined by six main factors: the person's age, the daily (or monthly) benefit, how long the benefits pay, the elimination period, inflation protection, and the health rating (preferred, standard, sub-standard). Most companies will offer couples and multi-life discounts on individual policies. Some companies define “couples” not only to spouses, but also to two people who meet criteria for living together in a committed relationship and sharing basic living expenses. The average age of purchasers has dropped from 68 years in 1990 to 61 years in 2005, and the number of purchasers who are under age 65 has increased significantly.^[6]
Most companies offer multiple premium payment modes: annual, semi-annual, quarterly, and monthly. Companies may add a percentage for more frequent payment than annual. Options such as spousal survivorship, non-forfeiture, restoration of benefits and return of premium are available with most plans.
The Deficit Reduction Act of 2005 makes the Partnership for Long Term Care available to all states.^[9] Partnership provides "lifetime asset protection" from the Medicaid spend-down requirement. Originally, four states had Partnership plans: New York, Indiana, Connecticut, and California.^[10] As of October 2008, an additional 16 states had active Long Term Care Insurance Partnership programs.^[11]

Benefit eligibility and deductibles

This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (January 2009)

You qualify for covered benefits with most plans when you need help with activities of daily living or when you need help because you have a severe cognitive impairment.
Most policies have an elimination period or waiting period similar to a deductible. This is the period of time that you pay for care before your benefits are paid. Elimination days may be from 20 to 120 days. The higher deductible period the lower the premium. Some policies require intended claimants to provide proof of 20 to 120 service days of paid care before any benefits will be paid. In some cases the option may be available to select zero elimination days when covered services are provided in the home in accordance with a Plan of Care. Some policies require that the policy for long-term care be paid up to one year before becoming eligible to collect benefits.

Income protection insurance

Income Protection Insurance (IPI) is an insurance policy, available principally in the United Kingdom, Ireland and Australia, paying benefits to policyholders who are incapacitated and hence unable to work due to illness or accident. IPI policies were formerly called Permanent Health Insurance (PHI).

Relevant concepts

• Incapacity will be defined on one of the following four bases:
  • Own occupation – the policyholder is incapacitated if they are unable, following illness or accident to perform their own occupation and are not working in another job.
  • Suited occupation – the policyholder is incapacitated if they are unable, following illness or accident to perform an occupation suitable to them given their education and training etc.
  • Any occupation – the policyholder is incapacitated if they are unable, following illness or accident to perform any occupation at all.
  • Activities of daily living (ADLs) – the policyholder is incapacitated if they are unable, following illness or accident to perform a number of defined functions such as dressing and undressing, washing, eating, climbing stairs, shopping, cooking etc. The policy will define the number of functions and their definitions.
• Benefit limits – nearly all policies limit the benefit payable to some percentage of the policyholder's normal earnings. The limit is usually around 70% of gross earnings, but could be less for high earners. Any state benefits payable may reduce the maximum benefit and benefits from any other policies may also reduce the maximum.
• Deferred period – the deferred period is the time between a valid claim and the commencement of benefit payments. The deferred period chosen has a significant influence on the cost of a policy (see below).
• Proportionate benefit – to encourage the return to work of a policyholder recovering their health, many life offices offer to pay a reduced benefit if the policyholder takes a part time or lower-paid job after recovering their health.
• Free limit – the IPI policy will be only be valid while the policyholder is permanently resident in the area defined in the policy. The area will be at least the UK, probably the EU or Western Europe and could include the USA and other developed countries. Most policies will allow holidays and temporary residences outside of these areas.

Product features

Benefits

IPI policies offer a number of benefits in comparison to other insurance policies such as accident, sickness and unemployment insurance or personal accident and sickness (PAS):

• Benefits are payable when the policyholder becomes incapacitated and after the deferred period has passed and continue until the earliest of death, recovery of health, retirement or the term of the contract.
• Benefits are paid regularly (usually weekly or monthly) and are free of tax.
• The insurance company cannot cancel or refuse to renew the policy provided that the policyholder continues to pay the premiums.
• A waiver of premium option may be provided whereby premiums for the IPI policy are not required while benefits are being paid from the policy, but the policy cover continues as normal.

Restrictions

• The policies do not pay out if the policyholder becomes unemployed for a reason other than illness or accident.
• The deferred period is usually quite long, often a minimum of 4 weeks but perhaps as long as 52 weeks. Premiums decrease as the deferred period increases.
• There are a number of exclusions which apply to most policies, so that no benefits are payable for accidents or illness arising from events such as drug or alcohol abuse, criminal acts, intentional self-harm, wars and pregnancy.
• Due to the benefit limits, the maximum regular payment is usually restricted to prevent moral hazard – if the benefit exceeds the policyholder's income they have a reduced incentive to return to work once their health recovers.
• On change of occupation (or unemployment) of the policyholder the policy may become invalid, or the life office may require the premiums to be changed to reflect the new risk.
• For individual policies, as the benefits paid are not taxable income, the tax relief available to the policyholder may be reduced so, for example, tax relief on pension contributions is no longer available.

Product variations

In addition to standard fixed-premium IPI policies there are a number of variations available from some life offices:

• Renewable IPI – renewable policies give the policyholder a right to renew the policy, possibly with an increase in cover, at a set period (often 5 years), based on the prevailing premiums for a person of their age and occupation. Premiums will initially be cheaper than a fixed IPI policy but will then increase each renewal as the policyholder gets older.
• Reviewable IPI – the term of a reviewable IPI policy will be the same as a fixed policy, but the premiums will be reviewed (and almost invariably increased) by the life office every few years, based on its general rates (not based on the health or claims of the policyholder). Initial premiums will then be cheaper than for a standard policy.
• Increasing IPI – the value of the benefit payable by a fixed-benefit policy is eroded over time by inflation so policies whose benefits increase are often more suitable. The benefits may increase at an indexed rate (such as the Retail Prices Index), a fixed percentage or by a percentage chosen by the policyholder every few years. For such increasing policies, premiums usually increase as well.
• Unit-linked IPI – other IPI policies have no investment element and hence no surrender value, however a unit-linked policy has an investment element similar to unit-linked life assurance policies. Premiums will normally be more expensive than standard policies due to the investment element, and could be still more expensive if the return on the invested premiums is poor.
• Group IPI – employers may provide a group IPI policy for their employees. For group policies a maximum payout period may apply and the policy will expire if the employee ceases employment with the employer.

Suitability and need

• IPI policies meet the general need of wage earners to protect their income against the inability to work due to accident and illness. The level of state benefits provided (such as statutory sick pay (SSP) and incapacity benefit) usually falls well below the income of average earners, so additional insurance is required to make up the difference. If a policy is purchased it is usual for the term of the policy to last until the retirement age of the policyholder. For those not working such as parents caring for children, a policy paying out based on ADLs is appropriate as the definitions for incapacity based on occupation may not be relevant.
• IPI policies are not suitable insurance against unemployment in general as benefits are only paid if the unemployment arises due to incapacity. An accident, sickness and unemployment insurance policy or Mortgage Payment Protection Insurance may be needed as an alternative or to complement the IPI policy.
• IPI policies do not provide health insurance, death benefits or critical illness cover, so health insurance and/or life assurance and/or critical illness cover may also be needed by the policyholder.

The choices involved and the potential for confusion and buying the incorrect product means it is consideredessential that consumers consult an Independent Financial Adviser (IFA).

Pricing

IPI policies are relatively expensive due to the guarantees offered by the policy. However, premiums decrease as the deferred period increases and choosing a 'suited occupation' or 'any occupation' option over an 'own occupation' will likely reduce the cost of the policy.

Taxation

Premiums paid by individuals are not eligible for any tax relief. Premiums paid by employers to provide cover for their employees are tax-deductible as a business expense and are a taxable benefit to the employee. Benefit payments paid from the policy, following an accident or illness affecting the policyholder, are free of income tax and National Insurance contributions for individual policies. For group policies, benefits are paid as taxable and NIable earnings.

Regulation

IPI policies are classed as long-term insurance and are regulated by the Financial Services Authority (FSA) under its Insurance Conduct of Business Sourcebook (ICOBS) rules.^[1] This requires the issuing insurance company to keep records of the contract for a minimum of six years, and the policyholder has a minimum of 30 days to cancel the contract. If cancelled, the policyholder is entitled to a full refund of any premiums paid.

Total permanent disability insurance

Total Permanent Disability (TPD) is a phrase used in the insurance industry and in law. Generally speaking, it means that because of a sickness or injury, a person is unable to work in their own or any occupation for which they are suited by training, education, or experience. An individual or group of individuals can insure themselves against it through a disability insurance policy, as part of a life insurance package or through worker's compensation insurance.

Definitions of permanent disability

Ballentine's Law Dictionary defines a permanent disability is one that "will remain with a person throughout" his or her lifetime, or he or she will not recover, or "that in all possibility, will continue indefinitely." ^[1]
Insurance companies often have slightly different definitions of what determines permanent disability. However typical definitions would include:

• Loss of two of: eyes, arms or legs.
• Absence from work for six months due to an accident or illness, without expectation of returning to work.

United States & Canada

Under Worker's compensation law, each state and province has a definition of permanent disability.^[2][3][4][5]
Under No-fault insurance law, New York defines significant injury as including a permanent loss of use.^[6]

Distinctions

TPD differs from income protection insurance in that the insured person must be permanently disabled for the insurer to pay out, rather than just absent from work for an extended period of time.

Disability insurance

Disability Insurance, often called DI or disability income insurance, is a form of insurance that insures the beneficiary's earned income against the risk that a disability will make working, (and therefore earning), impossible. It includes paid sick leave, short-term disability benefits, and long-term disability benefits.^[1] Statistics show in the US a disabling accident occurs every second^[2].

Types of disability insurance

Individual disability insurance

Those whose employers do not provide benefits, and self-employed individuals who desire disability coverage, may purchase their own policies on the open market. Premiums and available benefits for individual coverage vary considerably between different companies, for individuals in different occupations, and by state and country. In general, premiums are higher for policies that provide more monthly benefits, pay the benefits for a longer period of time, and start payments for benefits more quickly following a disability. Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances. There are many web-based disability insurance calculators to determine the disability insurance needed.^[3]

High-limit disability insurance

Traditional disability carriers have limitations on the monthly benefits that can be purchased, which limit the benefits for high income earners. Benefits will normally cap at $20,000-$25,000 of monthly benefits except in the high-limit disability market. High-limit disability insurance is designed to keep individual disability benefits at 65% of income regardless of the income level. Coverage is typically issued on top of coverage that is already in force. With high-limit disability insurance, benefits can be anywhere from an additional $2,000 to $100,000 per month. Issue (one policy) and participation (other individual disability insurance or group long-term disability) coverage has gone up to $30,000 with some companies.

Key-person disability insurance

Key Person Disability Insurance provides crucial benefits for any functioning business to protect the company from financial hardship that may result from the loss of a key employee due to disability. Key Person coverage provides cash flow to help a company move forward and maintain a profit in the event a key employee becomes disabled. The company could use the disability benefits to hire a temporary employee should the disabled employee's prognosis appear to be a short-term disability. In the unfortunate circumstance of a permanent disability, benefits would then be used to help defray the costs related to hiring a replacement employee, such as recruitment, training, startup, loss in revenue and unfunded salary continuation costs.

Business overhead expense disability insurance

Business Overhead Expense (BOE) coverage is designed to reimburse a business for overhead expenses should the owner experience a disability. Eligible benefits include: Rent or mortgage payments, utilities, leasing costs, laundry/maintenance, accounting/billing and collection service fees, business insurance premiums, employee salaries, employee benefits, property tax, and other regular monthly expenses.

National social insurance programs

In most developed countries, the single most important form of disability insurance is that provided by the national government for all citizens. For example, the UK's version is part of the National Insurance; the U.S.'s version is Social Security (SS)—specifically, several parts of SS including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). These programs provide a floor beneath all the other piecemeal forms of disability insurance. In other words, they are the safety net that catches everyone who was either (a) otherwise uninsured or (b) otherwise underinsured. As such, they are very large, very important programs, with many beneficiaries. The general theory of the benefit formula is that the benefit is not large but is enough to prevent abject poverty.

Employer-supplied disability insurance

Since one of the top reasons for becoming disabled is getting hurt on the job, it is not surprising that the second-most important form of disability insurance is that provided by employers to cover their employees. There are several subtypes that may or may not be separate parts of the benefits package: workers' compensation and more general (but very basic) disability insurance policies.

Workers' compensation

Main article: Workers' compensation

Workers' compensation (also known by variations of that name, e.g., workman's comp, workmen's comp, worker's comp, compo) offers payments to employees who are (usually temporarily, rarely permanently) unable to work because of a job-related injury. However, workers' compensation is in fact more than just income insurance, because it may pay compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), general damages for pain and suffering, and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance). Workers compensation is a good benefit for on-the-job accidents but the weakness is the lack of coverage while not working. Statistics have shown that the majority of disabilities occur while the injured person is not working and therefore is not covered under workers' compensation^[4].

Other

These policies offer payments to employees who are (usually temporarily, rarely permanently) unable to work because of any injury or illness, even if it is not job-related. Unlike workers' compensation, this coverage may not involve any aspect of health insurance, life insurance, or payments for pain and suffering. Similarly to most employer-supplied health insurance, these plans are essentially just open-market plans with the advantage of a negotiated group rate. That is, they are similar to what an individual would buy, but they are purchased with a volume discount. Another general fact about them is that they tend to offer rather basic, low-end coverage, essentially because most people balk at paying for anything more. Sometimes each employee has the option to buy upgraded coverage if they are willing to pay for it.

Veterans' benefits

The various kinds of compensation and insurance that are provided to military veterans by organizations such as the U.S. Department of Veterans Affairs (VA) are very much analogous to workers' compensation, with soldiers, sailors, and marines being the analogues of the worker. In both cases, the overall compensation system involves more than just one type of insurance, but rather encompasses health insurance, disability income insurance, life insurance, and even mortgage insurance on VA mortgages. The scope of each of these is limited. For example, the life insurance aspect is limited only to paying (rather small) survivors' benefits to survivors of veterans killed in the course of their service; it is not a general term life policy.
Newsweek magazine's cover story for the issue of March 5, 2007 discusses the problems that American veterans of the wars in Afghanistan and Iraq are currently facing in receiving their VA benefits. The article tells the story of one veteran who waited 17 months to start receiving payments from the disability income insurance aspect of his VA coverage. Another article, in the New York Times, points out that besides the long waits, there are also inequalities based on which state a vet is from and whether he or she is a veteran of the regular Army, the National Guard, or the Reserves.^[5] The Newsweek article says that even when a veteran manages to get his or her claim approved (which can be burdensome),

"The compensation is not huge. A veteran with a disability rating of 100 percent gets about $2,400 a month—more if he or she has children. A 50 percent rating brings in around $700 a month. But for many returning servicemen burdened with wounds, it is, initially at least, their sole income."^[6]

According to a sidebar in the same Newsweek article^[7], the Americans injured in these wars, for all the obstacles to proper care, will still probably receive much better compensation and health care in years to come than injured Afghani or Iraqi soldiers. And of the two groups (U.S. disabled vets and Middle-Eastern disabled vets), the latter group is larger.

Claims: what is covered, and for how long

The important variables regarding claims are listed below. Not every variable matters to every type of disability insurance, but most of these are generally relevant.

• Was the disability unpredictable (not resulting from previously-known chronic illness)?
• Was the disability incurred in the course of performing job-related duties?
• How long is the waiting period before claim payments start?
• What other insurance policies will pay claims for this event?
• How much money will be paid per week/month/pay period?
• For how many weeks/months/pay periods will payments continue?
• What if the beneficiary is not totally disabled, but only partially?

Examples of how each variable may be important

Was the disability unpredictable (not resulting from previously-known chronic illness)?

For example, a potential policyholder seeking a regular individual policy on the open market must warrant that he is in good health and to the best of his own knowledge is not currently HIV-positive. A general principle of insurance is that the policyholder sells risk that, to the best of his knowledge, is not higher than the stated circumstances imply. Withholding relevant circumstances or hiding them is selling something that is not what it is represented to be. Analogies are insider trading using material non-public information and making fraudulent (incomplete or false) seller disclosure in a real estate transaction.

Was the disability incurred in the course of performing job-related duties?

For example, workers' compensation policies are not obligated to pay claims for disability that is not job-related. Insurance for such risks can indeed be purchased, but because the risks are more inclusive, the premiums are higher. A policyholder always needs to understand what she is or isn't buying with her premium. And the insurer is legally obligated to specify exactly what coverage is or isn't being sold.

How long is the waiting period before claim payments start?

Because most disability events are temporary, insurance coverage for them is cheaper when the policyholder agrees to wait longer before receiving claim payments. For example, if a policy-holder breaks a finger, it may only be 2 months before he or she is able to do his or her job again. If the policy-holder agreed to wait 60 days before receiving claim payments, then the insurer will not have to pay a claim for the event. This reduction to the insurer's risk is reflected in the lower price that was paid to purchase coverage (lower premiums).
Another important example in this category is that the standard waiting period before starting to collect Social Security's disability benefits is one year. Disability insurance claim approval from the insurance companies can often be delayed for a similar length of time.
It is common for a claimant to receive Social Security disability benefits but be denied benefits from an insurance company because it uses a different definition of qualifying disability.

What other insurance policies will pay claims for this event?

For example, if an auto accident renders a policy-holder unable to work for 5 months, the person's auto insurance policy with Company A may include coverage for lost income during this period. (Often lost-income coverage is a separate rider to the auto insurance policy that one must pay extra for if one chooses to have it.) In this case, the policy-holder may choose to make a claim with Company A and either (1) make another, secondary claim with Company B, which issues the policy-holder's disability income insurance, or (2) decide that the primary claim is enough and avoid making an unnecessary claim with Company B. Sometimes there is a previously established order of priority that rules that Company B is liable for the claim only to the extent that Company A's coverage is not enough.
Another important example in this category is that if the injury is someone else's fault, their liability coverage from, say, an auto, home, or personal umbrella policy may pay for the injured person's lost income, and therefore that person will not make a claim on his or her own policy.

How much money will be paid per week/month/pay period?

For example, it is rare for any policy to pay the full amount of the beneficiary's regular salary. (Policies that do are expensive, "high-end-of-the-market"-type policies.) Generally it will pay only some percentage, such as 80%, or it will pay only a flat amount, such as $1500/month, regardless of the normal salary amount. The idea behind this reduced benefit is that it is enough to protect the beneficiary from mortgage foreclosure, or to keep the beneficiary from running up huge debts during convalescence, even though it is not enough to live a carefree lifestyle on. In return for this restriction on the benefits, the premiums are lower.

For how many weeks/months/pay periods will payments continue?

Most policies in the lower and middle areas of the market will have a cap, for example, 5 years. More expensive policies will pay all the way to the age when the national social insurance program takes over as the primary income source. For example, in the U.S., this is usually at the individual's Social Security full retirement age; for most individuals, age 66. Also, in the U.S. most long term disability insurance policies require those receiving benefits to apply for Social Security disability benefits.

What if the beneficiary is not totally disabled, but only partially?

Most policies in the lower and middle areas of the market will only pay claims if there is no job that the beneficiary can possibly do. Others, referred to as own-occ policies, will pay the claim as long as the beneficiary cannot return to his or her own occupation. Own-occ policies cost more to buy (higher premiums) than non-own-occ, because their claims risk is greater. For example, suppose that a person's normal job involves lifting heavy boxes and getting paid $4000/month, and suppose this person gets injured, and can't lift so much weight. However, suppose further that the person is still capable of doing light assembly work at a workbench for $2000/month. If the policy is a less-expensive model, the insurer will decide that no claim will be paid, because the policy-holder is capable of working (although not at your his or her original occupation). But if the policy is an own-occ policy with a claim amount of 75% of normal salary, it will pay a claim of $3000/month. This payment will recur monthly until (a) the beneficiary is able to do his or her normal job again; or (b) the cap is reached (for example, 5 years later); or (c) the beneficiary reaches age 65 (when the policy ends and the beneficiary begins collecting Social Security).

Dental insurance

Dental insurance is insurance designed to pay a portion of the costs associated with dental care. There are several different types of individual, family, or group dental insurance plans.
In general, a dental insurance plan covers a percentage of the dental charges incurred at a dental office, and may include free preventative services such as cleanings. There is no industry standard annual maximum limitation, deductible, or co-pay. Such coverages and benefit limitations are determined by each insurance company.

Accidental death and dismemberment insurance

In insurance, Accidental Death and Dismemberment (also known as AD&D) is a term used to describe a policy that pays benefits to the beneficiary if the cause of death is due to an accident.

Accidental Death

In the event of an accidental death, this insurance will pay benefits in addition to any life insurance held by the client.^[1] This is called double indemnity coverage and is often available even when accidental death insurance is merely an add-on to a regular life insurance plan.^[2] Some of the covered accidents include traffic accidents, exposure, homicide, falls, heavy equipment accidents, and drowning. Accidental deaths are the fifth leading cause of death in the U.S.^[3] as well as in Canada.^[4]
Accidental death insurance is not an investment vehicle and thus clients are paying only for sustained protection. Insurance premiums are expected to rise in time. Most policies have to be renewed periodically (with revised terms), although the client's consent with renewal is often implicitly assumed.

Common exclusions

Every insurers maintains a list of events and circumstances that void the insured's entitlement to his or her accidental death benefit. Death by illness, suicide, non-commercial radiation, war injury,^[2] and natural causes are generally not covered by AD&D. Similarly, death while under the influence of any non-prescribed drugs or alcohol is most likely exempt from coverage. Overdose with toxic or poisonous substances and injury of an athlete during a professional sporting event may void the right to claim too.
Some insurance carriers will tailor their clients' coverage to include some of the above risks, but every such extension will be accompanied by increased premiums.
Due to these restrictions, the process of claiming the benefit may be relatively lengthy; the deceased client may have to undergo autopsy and the accident may have to be officially investigated before a claim is approved by the insurer.

Dismemberment

Fractional amounts of the policy will be paid out if the covered employee loses a bodily appendage or sight because of an accident.^[5][6] Additionally, AD&D generally pays benefits for the loss of limbs, fingers, sight and permanent paralysis. The types of injuries covered and the amount paid vary by insurer and package, and are explicitly enumerated in the insurance policy.

Coverage Types

There are four common types of group AD&D plans offered in the United States:

• Group Life Supplement - the AD&D benefit is included as part of a group life insurance contract, and the benefit amount is usually the same as that of the group life benefit;
• Voluntary - the AD&D is offered to members of a group as a separate, elective benefit, and premiums are generally paid as a payroll deduction;
• Travel Accident (Business Trip) - the AD&D benefit is provided through an employee benefit plan and provides supplemental accident protection to workers while they are traveling on company business (the entire premium is usually paid by the employer);
• Dependents - Some group AD&D plans also provide coverage for dependents.^[7]