Long Term Disability Insurance Definitions
- Accidental Death & Dismemberment (AD&D) Benefit – An optional benefit that provides a fixed lump sum for accidental death or for certain specified actual loss or loss of use of a limb or sight.
- Actively-at-Work Provision – An eligibility provision for group benefit coverage whereby an employee is not eligible for coverage if absent from work because of sickness or injury on the otherwise effective date of his or her coverage.
- Activities of Daily Living (ADLs) – Generally defined to include eating, bathing, dressing, transferring, toileting and maintaining continence.The inability to perform a certain number of ADLs triggers long-term care insurance benefits.
- Actual Age – The age of the applicant the day the application is in completed.
- Adjuster – An individual who handles claims on behalf of an insurance company. An adjuster can be either an employee of the insurance company or an outside representative hired by the company. Adjusters follow the policies, procedures and directions of the company employing them.
- Adverse Selection – The tendency of those who are most likely to have claims to also be those who are the most likely to seek insurance.
- Age Discrimination In Employment Act (ADEA) -A federal law that prohibits age discrimination for most working persons.The act, which applies only to employers with 20 or more employees, prohibits discrimination with respect to employee benefits.
- Age Nearest Birthday – The age of the applicant at the nearest birthday.
- Agent – Insurance company representative licensed by the state, who solicits, negotiates, or affects insurance contract and who provides services to policyholders for the insurer.
- Aggregate Indemnity – The maximum amount that may be collected for any disability or period of disability, under an insurance policy.
- AIB (Automatic Increase Benefit) – An optional benefit that allows a policyholder to increase his or her disability coverage without evidence of insurability.
- Annual Renewable Term (ART) Policy – A policy that is renewable annually and where the premium may be increased on the same basis.Also called ARDI (Annual Renewable Disability Insurance).
- Alternative Plan of Care – A plan of long-term care that is an alternative to what is covered under the policy.
- Alternative Dispute Resolution – (ADR) A method of resolving disputes without going to court. The most common types of ADR include appraisal, mediation and arbitration. Many insurance policies contain provisions requiring that disputes between the insurer and insured be resolved by binding appraisal or binding arbitration. Whether a particular ADR provision is good for the policyholder or not, depends on the details. Some are fair, and quite acceptable, while others are extremely unfair and should be avoided at all costs. More on this subject in the FAQs and under the specific insurance lines.
- Ambiguity – As used in connection with insurance, a provision in a policy that is reasonably subject to more than one interpretation.
- Anniversary Date – The date on which your insurance coverage will expire, which is usually one year from the date that coverage began.
- Application – A form submitted to the insurance company by the agent at the time of sale. It contains answers to questions of importance to the insurance company in its determination as to whether or not it will agree to sell a policy to the proposed insured, and if so, at what price.
- Appraisal – Refers to the value of personal or real property determined by a licensed, professional person. It can also refer to a type of ADR (see above).
- Arbitration – A method of resolving disputes in which a (hopefully) neutral third party listens to the facts and assertions of the parties and, acting in the role of a private judge, makes a decision on the matter. Decisions of arbitrators are usually final, binding and non-appealable.
- Association Group – A group formed from members of a professional or trade association for insurance under one master insurance contract.
- Attending Physician’s Statement – A report from the applicant’s personal physician verifying his or her physical qualifications for the coverage requested or to help establish the medical verification of a disability claim.