Recurrent disability provision
MR. WATSON: A question. You were disabled. You recovered. Then became disabled again. Is this a new disability (requiring you to go through the elimination period again) or is it a recurrent disability (picking up where you left off)?
MR. WATSON: Answer. If you were back at work for more than six months, it is a new disability. Less than six months, the same disability (recurrent).
MR. WATSON: Let's talk about a disability that happens again, the same one. The provision is called a recurrent disability provision . This provision determines if the disability is the same disability or a new one.
MR. WATSON: Let's say you bought a five-year plan and you've been disabled for three years. You became disabled, and you went through the elimination period. It was long time with no money coming in. Finally they started paying you, and they paid you for three years. Got it?
ALL: Yes.
MR. WATSON: And you recover and go back to work again. And then you become disabled again. If you are back at work for less than six months and you become disabled again with the same disability, it would be considered the same one, a recurrent disability. You pick up right where you left off. Don't have to go through the waiting period again.
WOMAN: But you only get paid for two more years.
MR. WATSON: Yes. Exactly right. You only get paid for the remainder of the five-year plan.
MR. WATSON: If you're back at work for longer than six months and again become disabled, then the disability is considered to be a new one, even if it's the same disability. The issue is how long you were back at work. And then you have to go through the elimination period again, but then you'd get paid the benefit for five years because it's considered a new disability and it starts over. Y'all got it?
MR. WATSON: If it is a new disability then you would get a new benefit period and would have to go through the elimination period again.
MR. WATSON: So what's the dealio? What's the period of time for a disability for be considered recurrent?
ALL: Six months.
MR. WATSON: Six months or more, it's a-
ALL: New one.
MR. WATSON: Six months or less, it's the-
ALL: Same one.
MR. WATSON: Same one; it's a recurrent. You look confused!
WOMAN: So how long is the elimination period again?
MR. WATSON: Whatever you choose. The longer the elimination period the smaller the premium.
WOMAN: I heard six months, so I'm making sure.
MR. WATSON: That was just the example I gave.
WOMAN: There is one that would pay right away, but you said the premium was expensive?
MR. WATSON: Yes.
MAN: Shorter the period, the higher the premium. Right?
Non-disabling injury ****
- pays a benefit to offset medical costs resulting from an accident
- limited to a percentage of the monthly disability benefit
MR. WATSON: A non-disabling injury benefit will pay a guy if he suffers an injury that does not disable him.
STUDENT: Say What?
MR. WATSON: Let's say a guy is driving across Alligator Alley and he slams into an alligator. He flies through the windshield and is hauled off to the hospital and stitched up. He continues on to work. He is not disabled. Got it?
STUDENT: I'm waiting.
MR. WATSON: The point is, he's injured but not disabled. Had he been disabled he would qualify for the disability benefit. Some disability policies have a feature that pays if a guy suffers an injury but is not disabled. It's called a Non-disabling injury benefit. It is a medical expense benefit attached to a disability income policy.
STUDENT: How much does it pay?
MR. WATSON: It pays the actual cost of medical treatment but the amount is limited to a percentage of the monthly disability benefit. It's paid instead of other benefits under the policy because he was not disabled.
STUDENT: Nice.
MR. WATSON: Yep! If he had a disability policy with a $3000 per month benefit, this might pay him 10% or $300.
MR. WATSON: And what happened if three months later he's thrown through the windshield again?
WOMAN: That's it, one time. He wouldn't get another benefit.
MR. WATSON: Nope, he'd get it again. It's per accident. .
MR. WATSON: A non-disabling injury benefit pays you a percentage of the benefits, should you suffer an injury that does not disable you.
Elective Indemnity
MR. WATSON: This little deal, elected at the time you buy the policy, allows you to take a lump sum payment for certain named injuries.