Income Replacement

Income replacement contracts are disability insurance contracts in which the payout depends on how much income you lose. For example, assume that you are a surgeon and have an income loss contract. If your fingers were hurt, you might not be able to operate. However, you might get a job teaching medicine at the local medical school. The disability benefit that you would otherwise have received (under an income replacement contract) is reduced by the amount of money that you earn teaching. This type of plan is in contrast to the own occ policies under which the disabled doctor could have collected full benefits, despite his return to another occupation. Obviously, the income loss contract would be less expensive than the preferable own occ policy.

Benefit Period
Lifetime
Own Occupation (own occ)
Integration
Step Rated Policies
Accidental Benefits

This document was last modified on July 26, 1999

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