Our Blog

New England Disability and Life | Blog

Disability Insurance - The Incontestable Period. Part 2

Dean A. Schachter

0 of 0 votes

To prevent an insurance company from constantly looking back over someone's life whenever there is a claim the insurance industry adopted the incontestable period to give policyholders some degree of comfort, should there be a claim.

If there is a claim during the first two policy years, an insurance company will go to great lengths to review the claimant's past to make sure all questions were answered accurately. Should the company discover material misrepresentation by the insured, the company can alter the benefits of the policy or even cancel the policy and return all premiums.

After the first two years of a disability or life policy the company can NOT alter the benefits or cancel the policy. That is the Incontestable Period!

Comments
Disability Insurance - The Incontestable Period. Part 1

Dean A. Schachter

0 of 0 votes

Disability Policies and Life policies have what is called The Incontestable Period which is typically 2 years.

What does this mean?

The insured and the owner of a disability and/or life policy is required to answer all questions honestly. The underwriter is counting on that honestly when reviewing all the answers to the questions on the application.

Some people do not remember every detail of their work and medical history with 100% accuracy and the underwriter understands this but the important details of one's life should be fairly easy to reconstruct.

Forgetting a cold or flu five years ago is understandable but forgetting cancer, or a heart attack or mental illness is NOT understandable.

Comments
Dividends paid on Disability Policies!

Dean A. Schachter

0 of 0 votes

Policies purchased from Mutual Life Insurance companies pay dividends to the policy owner. That is because a Mutual Insurance company is owned by the policy holders.

This dividend can be quite substantial. This can be viewed by the policy owner as a refund or reduction in the premiums.

Comments
Disability Insurance - The Return to Work Benefit.

Dean A. Schachter

0 of 0 votes

Some policies have an additional benefit, at no additional cost, called Return to Work Benefit. This benefit is paid to the insured when he/she returns to work and is typically 50% of the benefit for total disability, payable for 6 months, regardless of the percentage of pre-disability income lost.

Comments
Disability Insurance - The Rehabilitation Benefit

Dean A. Schachter

0 of 0 votes

Some disability policies have an added benefit, at no additional cost, that pays for Vocational Rehabilitation. The benefit is based on the monthly disability benefit of the policy.

The dollar amount available is not stated in the policy but if the policy has this clause then the company will advise you as to how much money they would be willing to pay for rehabilitation.

Comments