Accumulation Period: A period of consecutive months that begins on the first day of disability and during which the elimination period must be satisfied.

Association Coverage: Group insurance issued to an association rather than to the employees of a business or members of a union.

Attending Physician Statement (APS): A report, completed by the proposed insured's (or, in a claim situation, the insured's) physician, which documents current and prior health history. Used in the evaluation process of approving an application (or claim).

Automatic Increase Rider: An optional benefit which provides automatic increases each year at either a stated percentage or the Consumer Price Index, despite changes in health, income or occupation.

Benefit Period: The longest period of time for which benefits are payable for continuous disability. Typical benefit periods are 2 year, 5 year, to age 65 or lifetime.

Business Overhead Expenses: A policy that reimburses a business owner for the day-to-day expenses of the business in the event of a disability. This type of policy usually has a one or two year benefit period.

Buy-Sell Agreement: An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner's share of the business and the exact terms of the buying and selling process are established before death or the onset of a disability.

Conditional Receipt: A receipt given for premium payment accompanying an application for insurance. If the application is approved as applied for, the coverage is effective as of the date of prepayment or the date on which the last of the underwriting requirements, such as medical examination, has been fulfilled.

Consumer Price Index: The Consumer Price Index for All Urban Consumers as published by the Federal Department of Labor. That index shows the rate of change in the cost of living (inflation) in the United States.

Conversion Privilege: The right given to an insured person to change insurance without evidence of medical insurability, usually to an individual policy, upon termination of coverage under a group contract.

Cost of living Rider: An optional benefit which provides for increases in the disability benefit during periods of disability. The amount of increase is based on a pre-set percentage or inflation.

Cross-Purchase Arrangement: An arrangement between two or more business owners that in the event of an owner's death or disability, the remaining owner or owners will purchase the business interest of the deceased or disabled owner.

Cumulative Benefit: In an overhead expense policy, the monthly benefit times the number of months the insured has been disabled after the elimination period.

Earned Income: Gross salary, wages, commissions, fees, etc., derived from active employment. This does not include investment income, rents, or amounts received from annuities or insurance policies.

Elimination Period: The consecutive number of days for which no benefits are payable at the start of a claim. An insured must be disabled all of those days before benefits are payable. Typical elimination periods are 30, 60, 90, 180 or 365 days.

Exclusions: Certain conditions and causes which are not covered by the policy. These are listed in the policy.

Future Increase Option: An optional benefit in a disability income policy that allows the insured future increases to the policy monthly benefit at specified dates (typically on insured's policy anniversary), with a requirement of only financial (and not medical) insurability.

Graded Premium: A premium structure where premiums start out low and increase each year. If the insured starts with a graded premium, they may change to a level premium on a policy anniversary. Premiums will then be based on attained age.

Guaranteed Renewable: A type of insurance which cannot be cancelled or altered by the insurance company as long as the insured continues to pay premiums on time. However, the premium may be increased for classes of insureds.

Income: Gross earned income, less business expenses, but before any other deductions. Income includes salaries, wages, fees, commissions, bonuses, business profits or other payments for personal services. It does not include unearned income from savings, investments, or real property.

Indexing: A provision which increases the insured's pre-disability earnings every year according to a given formula, so residual disability benefits will not lose purchasing power because of inflation.

Lifetime Disability Benefit: A benefit that is payable for the lifetime of the insured if continuously and totally disabled before a specified age (i.e., 45 or 55).

Loss of Income: The difference between an insured's prior income and current income. In better policies, if the loss of income is more than 75% of prior income, the loss is deemed to be 100% for purposes of the Residual Disability Rider.

Non-Cancelable: A policy which cannot be cancelled or altered by the insurance company as long as the insured continues to pay premiums on time, and whose premium will not increase up through the insured's age 65.

Participation Limit: The total amount of coverage which will be allowed by a company from all carriers.

Policy: All material which constitutes the contract of insurance.

Policy Term: The effective period of the policy, usually the period for which premiums are paid. 

Pre-Disability Earnings: The earnings level of the insured prior to the onset of disability.

Pre-Existing Condition: An injury, illness, or physical condition which existed prior to the issue of the disability policy.

Presumptive Disability: The presumption that the insured is totally disabled, even if still at work, if sickness or injury results in the total and complete loss of sight in both eyes, hearing in both ears, power of speech, or use of any two limbs. The elimination period is waived from the date of the loss and total disability benefits are payable while such loss continues until the end of the benefit period.

Prior Expenses: An insured's average monthly expenses for the same tax year on which his or her prior income is based for purposes of the residual disability rider.

Prior Income: The insured's average monthly income for the tax year with the highest earnings in the three years just prior to the date on which he or she became disabled.

Recovery Disability Rider: A rider which provides reduced benefits when and insured returns to work following a compensable period of total disability. Recurrent Periods of Disability: In some policies, recurrent periods of disability from the same cause or causes will be considered one continuous period of disability unless each period is separated by a recovery of six months or more.

Rehabilitation Benefit: A benefit paid to help meet some of the costs an insured may incur by enrolling in a rehabilitation program for the purpose of returning to his or her occupation.

Residual Disability: In better policies, a disability that causes an insured's income to fall more than 20% below its pre-disability level. Some companies include a loss of time requirement or the inability to perform some duties of the insured's regular occupation.

Social Insurance Substitute Rider: A rider which pays a benefit if the insured is disabled under the policy and not receiving social insurance benefits.

State Disability Benefit Insurance Laws: Laws enacted in California, Hawaii, New Jersey, New York and Rhode Island which provide the payment of benefits for the non-job-related sickness or injury.

Total Disability: The physical or mental inability to perform the major duties of one's occupation because of sickness or injury.

Transplant Donor Benefit: In some policies, the provision that the insured will be considered disabled as a result of complications incurred during a transplant or donor surgery.

Waiting Period: The consecutive number of days for which no benefits are payable at the start of a claim. An insured must be disabled all of those days before benefits are payable. Typical elimination periods are 30, 60, 90, or 180 days.

Waiver of Elimination Period: In some policies, the elimination period will be waived if an insured becomes disabled within five years after the end of a period of disability which lasted longer than six months and for which benefits were paid.

Waiver of Premium: In some policies, a provision which relieves the insured of having to make premium payments after he or she has been disabled for 90 days, or the elimination period, if shorter. In addition, premiums paid during those 90 days are refunded and premiums due during the 90 days after recovery are waived.

Worker's Compensation: Benefits paid to a worker to compensate for losses caused by a work-related injury or illness.