The benefit period for a disability income policy, as with long-term care insurance, is the period of time over which the insurer will make benefit payments. The insurer will pay disability income benefits for the length of the benefit period that the owner selects when purchasing the policy, assuming the disability continues for this entire time. Generally, the shorter is the benefit period the insured selects, the lower is the premium the insured must pay for the disability income coverage.
Typically insurers offer benefit periods for disability income coverage for a certain length of time, such as one year or five years or until a certain age such as sixty-five or seventy. After this age, the disabled individual likely will be receiving retirement benefits from retirement plans and government programs such as Social Security. At one time it was possible to select a lifetime benefit period under a disability income policy, but this is not widely available today. Of course, it is best to purchase the longest benefit period that the individual can reasonably afford.
Reproduced with permission. Copyright The National Underwriter Co. Division of ALM