Print This Page Return to Site 
Disability Benefits101: Working with a disability in California
Mike's Story: Life Insurance
<< Prev | Intro | Health | Income | Life
There was one last insurance issue for Mike to deal with before he could get on with his life as a big-league sportswriter. Confronted with his own mortality from a chronic diagnosis, Mike started thinking about life insurance. Sure, it was morbid thinking. But who was he to contradict what the doctors had told him?

Like most employers, his paper offered term life insurance. (Some employers also offer what’s called whole life insurance.) Term life insurance provides coverage for a designated period—five or ten years are the most common. Because of Mike’s diagnosis, he would only be eligible to apply for what’s called the guarantee issue amount because he was signing up during the initial enrollment period when medical records aren’t checked. In Mike’s case, he qualified for $64,000 worth of life insurance.

Two Types of Life Insurance
Term Life: Policy that provides coverage for a designated period of time such as 5 or 10 years or until a specific date, such as the insured reaching age 65. Policy benefits are only payable if loss occurs within the term, with nothing payable upon its expiration. Benefits normally decrease based on the insured’s age at the time of death. The policy has no cash accrual or cash value.

Whole Life: Policy that has a savings component (cash accrual) that builds a cash value and allow funds to be borrowed from the cash value. There is normally a surrender charge (penalty) if funds are borrowed from the policy’s cash value during the first 5 to 10 years. This surrender charge decreases the longer the individual is insured.

As Mike knew, if he took out a life insurance plan through his new employer he’d have to name a beneficiary. “Someone to inherit my great riches,” he laughed to himself. Throughout his life when asked to list a person to contact in case of emergency, Mike had always put down his little sister, Julia. She wasn’t so little anymore. She had a career, a husband and two kids. Mike jotted down Julia’s name.

And with that, Mike filed all his insurance papers away in a binder and headed for Dodgers stadium. The Giants were in town, and he was covering the rivalry for his new paper.
<< Prev | Intro | Health | Income | Life

Glossary for
Group Life Insurance

Pre-existing Condition
Any condition for which “medical care” was received within six months prior to the effective date of insurance coverage. Medical care includes the use of prescription drugs and physician consultations and services. During a pre-existing condition exclusionary period, coverage for that condition is either not provided or can be limited.

Medical Treatment/Care
Any medical care received by an individual for a medical condition. Examples of medical treatment include being prescribed medication, physician consultations, and therapy for a mental or physical condition.

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.

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.

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.
 More Terms...
Copyright © 2008 World Institute on DisabilityOffsite Link. Technology © 2002-08 Eightfold Way ConsultantsOffsite Link. Disclaimers. Privacy.
http://www.disabilitybenefits101.org/ca/situations/newlydiagnosed/feature4.htm