Disability Clause
What Does Disability Clause Mean?
A disability clause is a provision in a life insurance policy that provides specific benefits to the insured in the event of a disability. This may include a waiver of premium payments and a monthly disability income, though the exact benefits depend on the terms of the clause.
Insuranceopedia Explains Disability Clause
Disability clauses are essential in life insurance policies, as policyholders may become disabled during the policy term. These clauses benefit both the policyholder and the insurer: the policyholder avoids losing coverage, and the insurer retains a client. Additionally, as disability clauses often require higher premium payments, insurers may profit from policyholders who do not become disabled and claim benefits. The various benefit options available also allow policyholders to customize their life insurance policy to meet specific needs and manage risk, ensuring that their investment serves a valuable purpose.
