SOURCE: Business Benefits Insurance

August 30, 2010 10:33 ET

Make Sure Your Disability Policy Will Pay When You Need It -- Edholm of Business Benefits Insurance Gives Guidelines

ANDOVER, MA--(Marketwire - August 30, 2010) - Will your disability insurance policy pay benefits if you become disabled?

"A few words in your policy can make the difference between getting benefits or nothing at all," says Jim Edholm, president of Business Benefits Insurance in Andover, Mass.

If you have a top-end policy that includes the "own-occupation" definition, you're deemed disabled if you can't perform the job you were performing when the disability began, he writes in Massachusetts Lawyers Weekly.

But definitions of own-occupation vary from carrier to carrier. Here's how one insurer defines disability: "due to an Injury or Sickness the Insured Employee is unable to perform each of the Main Duties of his or her Own Occupation..." and has "...suffered a loss of income of at least 20 percent."

Since "each" means "each one," under this definition, an employee isn't disabled unless he or she can't do any of the main duties of the job, Edholm writes.

For an attorney with a disability that forces him or her to cut back on working 70-hour weeks and traveling extensively, that language can present a problem. That attorney can't do one of the major duties of the job -- travel or work extensively -- but he or she may still be able to perform other responsibilities such as overseeing subordinates, preparing briefs, Edholm says.

But there's a way to avoid this situation. Some carriers offer a definition that inserts the word "one" in place of the word "each" or "most" -- another variation. 

"By choosing a policy with the 'one main duty' definition, there's no wiggle room. If you can't do one main duty, you're disabled. Period," Edholm says. 

Plans with that definition typically cost about 10% more, but may well be worth the price for an attorney, doctor, dentist, architect or other highly paid professional, Edholm says.

Business Benefits Insurance (www.bbibenefits.com) is an employee benefits planning firm in Andover, Mass. Edholm's benefits blog can be read at http://bbibenefits.wordpress.com. More information is available by contacting Edholm at JimEd@bbibenefits.com or calling 978-474-4730.

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