Long-Term Disability Insurance Terms, Continued

Maximum Benefit Period (Benefit Duration): The maximum length of time for which benefits are payable under a long-term disability (LTD) plan, provided that the employee remains continuously disabled. This period of time typically ends at an age specificied in the LTD plan or when the insured employee reaches normal retirement age for Social Security.

Maximum Monthly Benefit: The highest dollar amount a disabled employee can receive on a monthly basis under a long-term disability plan.

Mental Illness and Substance Abuse Limitations: Limits on the period of time benefits may be paid when a disability is caused by a psychological, behavioral, or emotional disorder or by alcoholism or drug abuse. Benefits are often limited to 24 months unless the insured employee is confined to a hospital.

Minimum Monthly Benefit: The minimum amount paid as a monthly benefit after reductions for Other Income Benefits (see below). Some long-term disability plans guarantee a minimum monthly benefit.

Occupational Injury: An injury that occurs during the course of work or an illness caused by conditions in the work environment.

Other Income Benefits (Benefit Integration): Benefits from other sources of disability income, such as Social Security, workers' compensation, or disability benefits received from other employer-sponsored plans, received by an insured employee. Benefits payable under a long-term disability plan may be offset (reduced) by these other sources of income.

Physical Capacity: The capacity of an insured employee to perform job activities and tasks.

Pre-Disability Earnings: The amount of an employee's wages or salary in effect on the day before the disability began. Also called basic monthly earnings or covered earnings.

Preexisting Condition Limitations:. A physical or mental circumstance that existed prior to the date of an insured employee's insurance coverage. Long-term disability plans usually prohibit disability benefits for any illness or injury for which an employee received medical treatment within a specified time period before becoming covered under the LTD plan.

Recurrent Disability: A provision in an LTD plan intended to protect an employee who tries to return to work but becomes disabled again from the same or a related cause. If the second illness or injury happens within a certain period of time, usually six months, the insured employee is considered disabled from the original disability and will not be subject to a new elimination period.

Rehabilitation: Improvement in an employee's health and functionality, usually involving a program of clinical and vocational services with the goal of returning a disabled employee to a meaningful occupation.

Return to Work Provision: A provision to assist recovering employees return to work as soon as they become physically able. A return to work program may include temptarily reduced hours or modified job duties, and the employee can often receive up to 100% of pre-disability earnings through a combination of disability benefits and work earnings.

Survivor Benefit: A one-time lump-sum payment that provides benefits to an insured employee's eligible surviving family members after the employee dies due to a disability while receiving disability payments. This is an optional benefit in most LTD policies.

Vocational Rehabilitation: A training process used to return an employee who has been disabled to a different job or career. Vocational rehabilitation can include retraining, education, vocational assessment, labor market surveys, and job search assistance.

Waiting Period: The period of time between the date the disability begins and when payments from the disability insurance policy begin.  In order to become qualified for coverage under the policy, an individual must satisfy a certain number of nonstop days of service as an active, full-time employee.

Waiver of Premium: Exemption of an employee or employer from responsibility for making further long-term disability payments when an individual becomes disabled and eligible for benefits.

Workplace Modification or Accommodation: A benefit for the employer designed to provide aid to an employer when a disabled employee requires modification of the workplace or special adaptive equipment in order to return to work. The employer will usually be reimbursed for the cost of such modifications up to a maximum.

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