Use the glossary below to become more familiar with important terms related to disability insurance denial. Sokolove Law can help you better understand your legal rights and the steps needed to begin the process of fighting back.
Active Work Requirement: The minimum number of hours per week that an employee is required to work to qualify for and maintain eligibility for benefits
Activities of Daily Living: Bathing, preparing and eating meals, moving from room to room, getting into and out of beds or chairs, dressing, using a toilet.
Actual Damages: The loss actually sustained by a plaintiff for which compensation is sought.
Adjuster: A representative of the insurance company, who is responsible for investigating, evaluating and negotiating a policyholder’s claim. The adjuster also may calculate the amount of a loss and determine who is liable for damages.
Adjuster: A representative of the insurer who seeks to determine the extent of the insurer’s liability for loss when a claim is submitted.
Age Limits: The ages below or above which the insurance company will not issue a given policy or renew a policy in force.
Application: A form on which the prospective insured states facts requested by the insurance company and on the basis of which (together with any information from medical examiners, attending physicians, hospitals, investigations and the agent) the insurance company decides whether or not to accept the risk, modify the coverage offered or decline the risk.
Arbitration: A hearing between two or more parties that is decided by a third party as a way to settle a dispute.
Bad Faith: The term used to describe the actions of an insurance company that refuses or unreasonably delays benefits to a policyholder who has a legitimate claim.
Beneficiary: The person who may become eligible to receive, or is receiving, benefits under an insurance policy.
Benefit Period: The longest period of time for which benefits are payable for a disability.
Business Interruption Insurance: A type of policy that pays for loss of earnings, revenues, profits, etc., when operations are curtailed or suspended because of property loss.
Cancellation: Termination of an insurance contract by the insurance company or the insured, executed in accordance with provisions in the contract or by mutual agreement.
Carrier: An insurance company that “carries” the insurance; i.e., another name for an insurance company. (The terms “insurance company” and “insurer” are preferred because of the possible confusion of “carrier” with transportation terminology.)
Claim: The demand for benefits as provided by an insurance policy.
Claim File: Includes all of the insurer’s documents and notes regarding a claim made by the policyholder. The claim file can be a critical piece of evidence for an insured who institutes a bad faith lawsuit against the insurer because it may contain evidence that the insurance adjustor did not follow proper procedures or acted unreasonably in denying the claim.
Coverage: Scope of the protection provided under a contract of insurance.
Coverage Effective Date: The date an individual is enrolled in coverage. The effective date is usually not the same as the date of hire.
Declaration Page (Dec Sheet): The portion of an insurance policy containing a summary of the coverage and limits of insurance provided.
Decreasing Term Policy: A term policy outlining a decrease in benefits in accordance with a schedule.
Deductible: A provision or clause in an insurance policy that the first given number of dollars or percentage of expenses shall be paid by the policyholder before the insurance coverage kicks in.
Deferred Annuity: An annuity that pays income benefits at a designated future date, as opposed to an “immediate annuity,” which pays benefits at once.
Elimination Period: The time between the beginning of a disability and the date that benefits begin. Also called the Waiting Period.
ERISA (Employee Retirement Income Security Act): A federal law that sets minimum standards for pension and health plans provided by employers. It is designed to protect employee benefits.
Exclusions: Items for which no benefits are payable in an insurance policy. Or, items or conditions that are not covered by the general insurance contract.
Functional Capacity Evaluation (FCE): A series of tests used to evaluate a person’s physical abilities to determine whether he or she can return to previous job duties.
Gross Benefit Amount: The total benefit amount an insurance company pays before deductions. Deductions are made for an individual’s disability income and for earnings he/she is receiving.
Gross Income: Income before taxes and other deductions are made.
Gross Pre-disability Salary: The total pre-tax income paid to an individual by an employer before a disability began and while the individual was covered by disability insurance.
Group Contract: A contract of insurance made with an employer or other entity that covers a group of persons by virtue of their relationship to the entity. A group contract may be for life insurance, health insurance or an annuity.
Group Coverage: Coverage offered to an individual through a group, such as employer-sponsored, association-affiliated or professional group coverage.
Hospital Benefits: Benefits payable when an insured is hospitalized.
Individual Coverage: Coverage that you buy directly from an insurance company, usually through an agent. You are responsible for paying for the entire premium, and most individual policies require medical underwriting.
Initial Enrollment Period: The first time an individual is eligible to enroll in a group’s benefits programs. During this period, the individual’s medical history is not subject to review. Once enrolled, however, pre-existing condition exclusionary periods may apply.
Insured: The party to an insurance agreement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits or render service.
Lapse: Termination of an insurance policy due to failure to pay the premium.
Lifetime Policy: A policy guaranteed renewable or non-cancelable to age 65 (or sometimes later), or a policy paying disability benefits for life.
Long-Term Care Insurance: An insurance policy that provides benefits to someone who, as a result of chronic illness or disability, can no longer perform basic daily activities. Long-term care policies generally provide benefits for extended health care at home, nursing homes, or assisted-living facilities. These policies generally cover costs not covered by Medicare or Medicaid.
Long-Term Disability Insurance: This type of policy protects your income if you are unable to work as a result of illness or injury that lasts more than 12 weeks on average. Typically, policies will cover between 40% and 70% of your salary, free of tax.
Mediation: Agreement between parties to take part in a structured settlement negotiation through the guidance of a neutral expert. By participating in this process, the parties do not agree that they will actually settle and the mediator does not have the authority to impose such a settlement.
Medical Underwriting: The review of an individual’s medical history and/or medical records to determine if the individual is eligible for coverage. Medical underwriting, which may include new medical testing, can be used to deny coverage or determine if a particular pre-existing condition will be covered.
Medicare: A government-sponsored health insurance program for the elderly and disabled.
NAIC: National Association of Insurance Commissioners. An association of state insurance commissioners active in discussions of regulatory problems and in the formation and recommendation of uniform practices and legislation.
Net Benefit Amount: The benefit amount an insurance company pays after deducting income.
Offset: Insurers sometimes will try to reduce or “offset” what they owe to a claimant who is also receiving assistance through SSDI or another benefits program.
Partial Disability: When an insured is physically unable to perform some, but not all, of his or her regular job functions because of sickness or injury.
Plaintiff: The party who brings a legal action complains or sues and is so named on the record.
Portability: A provision in an insurance contract that allows the insured to retain benefits upon change of job.
Pre-Existing: A condition of health or physical condition that existed before a health policy was issued. Generally, for an insurer to deem a condition pre-existing, the insured must have seen a doctor and been diagnosed for the condition prior to the policy taking effect.
Pre-existing Condition Exclusionary Period: The period of time from the coverage effective date that the insurer does not cover a pre-existing medical condition. The individual will normally be covered for the condition once the specified time has elapsed.
Premium: The periodic amount of money paid to keep a policy in force.
Punitive Damages: A monetary award to deter or punish a company for its fraudulent, oppressive or malicious behavior.
Rescission: Canceling an insurance policy due to nondisclosure of a material fact or misrepresentation of a material fact on an insurance application.
Retroactive Payments: Payments made for the period between disability onset and application approval.
Rider: An amendment attached to a policy that modifies the conditions of the policy by expanding or decreasing its benefits or excluding certain conditions from coverage.
Service Wait: The period of time an individual is required to be employed by a company or be a member of an association before becoming eligible to enroll for the group’s health coverage. Also known as the minimum service requirements.
Short-Term Disability Insurance: An insurance policy that replaces a portion of lost salary for a period of six months or less.
SSDI (Social Security Disability Insurance): A federal program that provides assistance to people with disabilities who have paid Social Security taxes.
Statute of Limitations: A legal provision that limits the period of time in which a person can initiate legal proceedings. The specific period of time varies based on the type of case and the state in which a claim is filed.
Underwriter: A person trained in evaluating risks and determining rates and coverage for them.
Unearned Premium: The portion of an advance premium payment that has not yet been used for the coverage written.
Worker’s Compensation: Legislation that provides employees who are injured on the job with the right to medical care for the injury and/or monetary payments to compensate for lost wages resulting from the injury.
Write: In insurance terms, to insure. It also means to underwrite or to sell insurance.
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