What Does Disability Clause Mean?
A disability clause is a provision in a life insurance policy that offers certain benefits to the insured in case they become disabled. It may include a waiver of premium and a monthly disability income, but the exact benefits depend on the clause.
Insuranceopedia Explains Disability Clause
Disability clauses are necessary in life insurance policies because policyholders sometimes become disabled. They benefit both the policyholder and the insurer because the policyholder does not want to lose coverage, and the insurer does not want to lose a client. Moreover, as they require a higher premium payment, the insurer stands to make a profit on policyholders who never become disabled and claim their benefits. Nevertheless, the many benefit options can help policyholders tailor their life insurance policy to meet their specific needs and risk such that their money does not necessarily go to waste.