Disability Insurance Glossary Terms

Click on a term below to see its definition:

  • Attending Physician Statement (APS)

    If an underwriter decides it’s necessary to take a closer look at your health, either because of something you disclosed on the application or because of the results of your paramedical exam, then he or she will request a written summary of your medical history from your doctor or hospital. This document is called an APS, or “attending physician statement.”

    You don’t pay for the APS, but it’s expensive and time consuming for the insurer, which is why an APS is only requested when the underwriter sees a need for it. An APS can slow down a life insurance application considerably because it may take your physician days to weeks to find the time to complete it, and it requires extra work on the part of the underwriter to go through it.

    An APS might be requested during an application for life insurance or long-term disability insurance.

    The APS is sent directly from your health care provider to the insurance underwriter. It is private health information protected by HIPAA.

  • Concealment

    The deliberate hiding of or failure to disclose “material” information known to be relevant in the underwriting of an insurance policy.

    For example, John tells his agent during the application process and says he has never smoked but did five years ago and has since quit, if it comes to light insurer has the right to cancel the policy.

  • Elimination period

    The time period between an injury and the receipt of benefit payments.

  • Exclusions

    Provisions in an insurance policy that clarify coverage and explain the circumstances in which benefits will not be paid.

  • Lapsed

    When a policy is terminated due to a non-payment of premiums.

  • Paramedical exam

    A paramedical exam is a carrier-required short health exam performed at the applicant’s convenience.

    It is at no charge to the applicant, and the technician will perform it at your home or place of work, if convenient for you. During the exam, your height, weight, blood pressure and pulse will be measured. You will also be asked to provide a blood sample and urine sample. In some cases, an EKG and saliva sample will be taken as well.

    Here is more information on what to expect from your paramedical exam.

  • Premium

    The cost of purchasing the policy. This can be paid monthly, quarterly, semi-annually (every six months) or annually (once per year).

    Depending on the policy type purchased, premiums can be: level (stay the same for the life of the policy); attained-age (rate changes after each birthday); community-rated (the same for everyone in a particular area); age-banded (the same for everyone within the same age group or range), or various other methods.

  • Rating

    Also called “class” or “rate categories”.

    The category, based on health status, that the underwriters at a given insurer designate to an applicant to determine the premium.

  • Riders

    Additional options that can be placed on an insurance policy. Typically, these have the potential of enhancing coverage in certain circumstances. However, in most circumstances, they may not be worth the extra cost.

  • Underwriting

    Underwriting is the process by which an insurer determines the risk of insuring you.

    Based on the applicant’s health status and history, avocations, family health history and paramedical exam results, an underwriter will evaluate the data, compare to the actuarial tables, and assign an underwriting class. This will determine how much the policy will cost the applicant, if s/he accepts the underwriter’s offer of coverage.

  • Waiting period

    The time between the filing of an insurance claim and the payments made on the claim.

    Example: Typically, the longer the waiting period on an insurance claim, the cheaper the policy will be for the holder.

  • Waiver of premium rider

    A policy add-on that will waive the insurance policy premium if the insured is disabled for six months. Once the disability ends, premium payments resume. What is considered a disability is determined by each insurance carrier.