Texas General Lines — Life, Accident, Health and HMOHealth InsuranceMedium
A client is reviewing their new disability income policy and notices a clause that states if total disability recurs within 6 months of the end of a prior disability for the same or related cause, it will be considered a continuation of the prior disability. What is this clause called?
- AResidual Disability rider
- BPartial Disability rider
- CRecurrent Disability clause
- DPresumptive Disability clause
Show answer & explanationAnswer & explanation
Correct answer: C. Recurrent Disability clause
The Recurrent Disability clause prevents the insured from having to satisfy a new elimination period for a relapse of the same or a related disability within a short timeframe.
Why the other options are wrong
- A. A Residual Disability rider provides benefits for a loss of income due to disability, even if able to work part-time.
- B. A Partial Disability rider provides benefits for a disability that prevents performing some, but not all, duties.
- D. Presumptive Disability assumes total disability if certain severe conditions occur (e.g., loss of sight, hearing).
Recurrent Disability Clause
A provision in a disability income policy that specifies how a recurring disability, from the same or related cause, within a certain period after recovery will be treated.
- Prevents a new elimination period from being applied.
- Typically applies if the recurrence happens within 3 or 6 months.
- Encourages policyholders to return to work without fear of immediate re-qualification.
Memory trick: Disability clauses cover all the 'what ifs' of being unable to work.