How A Claim is Defined

Insurance policies are sold in the marketplace to provide coverage for random unknown events. What triggers a claim under an insurance policy is when a person with insurance experiences an insured event. Under a group insurance contract an employer provides tax effective insurance protection to an employee and his/her family. A group insurance policy also provides the employer with a way to help subsidize the costs associated with medical and dental expenses and loss of earnings from short term absences from work due to illness or injury.

Basic Life Insurance

Basic Life Insurance - Death

Triggering event: Death of an employee

Who it happens to: Employee

What is payable: Death benefit outlined in the group insurance policy

Comments: Typical coverage is a flat amount or a multiple of salary subject to a non-evidence maximum (maximum amount of coverage without the need to provide evidence of good health) and overall maximum (total available maximum including proof of good health)

 

Basic Life Insurance - Disability

Triggering event: Total disability as outlined in the group insurance contract

Who is happens to: Employee

What is payable: Waiver of premium

Comments: Upon approval of the disabled claim, the insurer waives payment of premium for life insurance coverage for both the employer and employee for the entire period of disability

 

Basic Life Insurance - Conversion

Triggering event: Loss of group life insurance coverage

Who it happens to: Employee

What is payable: Individual insurance policy is issued

Comments: On loss of group life insurance coverage, the employee is eligible to convert his basic life insurance amount to an individual life insurance policy without providing evidence of insurability up to a maximum of $300,000. Conversion must be requested within 30 days of loss of group life insurance coverage.

 

Optional Life Insurance

Optional Life Insurance - Death

Triggering event: Death of an employee or spouse

Who it happens to: Employee or spouse

What is payable: Death benefit outlined in the group insurance policy

Comments: Typical amount is provided in flat units ($10,000 or $25,000) or a multiple of salary

 

Optional Life Insurance - Disability

Triggering event: Total disability as outlined in the group insurance contract

Who is happens to: Employee

What is payable: Waiver of premium

Comments: Upon approval of the disabled claim, the insurer waives payment of employee and spousal optional life insurance premium for the entire period of disability

 

Optional Life Insurance - Conversion

Triggering event: Loss of group life insurance coverage

Who it happens to: Employee or spouse

What is payable: Individual insurance policy is issued

Comments: On loss of optional group life insurance coverage, the employee and spouse are eligible to convert their optional life insurance amounts to an individual life insurance policy without providing evidence of insurability up to a maximum of $300,000. Conversion must be requested within 30 days of loss of group life insurance coverage.

 

Dependent Life Insurance

Dependent Life Insurance - Death

Triggering event: Death of a spouse or child

Who it happens to: Spouse or child

Comments: Typical coverage is $5,000 or $10,000 for spouse and $2,000 to $5,000 for each child

 

Dependent Life Insurance - Disability

Triggering event: Total disability as outlined in the group insurance contract

Who is happens to: Employee

What is payable: Waiver of premium

Comments: Upon approval of the disabled claim, the insurer waives payment of employee and dependent life insurance premium for the entire period of disability

 

Dependent Life Insurance - Conversion

Triggering event: Loss of dependent life insurance coverage

Who it happens to: Spouse

What is payable: Individual insurance policy is issued

Comments: On loss of dependent life insurance coverage, the employee is eligible to convert his/her spousal dependent life insurance amounts to an individual life insurance without submitting evidence of insurability

 

Survivor Income Benefit

Survivor Income Benefit - Death

Triggering event: Death of an employee

Who it happens to: Employee

Comments: A monthly survivor benefit is paid to surviving spouse and children of deceased employee. Typical coverage is 10% to 15% of employee’s gross salary for spouse and 5% to 20% of employee’s gross salary for child

 

Survivor Income Benefit - Disability

Triggering event: Total disability as outlined in the group insurance contract

Who is happens to: Employee

What is payable: Waiver of premium

Comments: Upon approval of the disabled claim, the insurer waives payment of employee and employer life insurance premium for the entire period of disability

 

Survivor Income Benefit - Conversion

Triggering event: Loss of survivor income benefit insurance coverage

Who it happens to: Employee

What is payable: Individual insurance policy is issued

Comments: On loss of coverage, the employee is eligible to convert his current insurance amount to an individual life insurance policy without providing evidence of insurability. The maximum amount convertible is the value of benefits payable to the employee’s dependents had the employee died at time of conversion.

 

Paid Up Life Insurance

Paid Up Life Insurance - Death

Triggering event: Death of an employee

Who it happens to: Employee

What is payable: Flat amount typically between $2,000 and $25,000

 

Basic Accidental Death and Dismemberment

Basic Accidental Death and Dismemberment - Death

Accidental Death and Dismemberment – Death from an accident

Who it happens to: Employee

What is payable: Typically a multiple of salary up to a specified maximum.

Comments: In many cases the death benefit under the Basic Accidental Death and Dismemberment policy duplicates the coverage under the Basic Life insurance benefit

 

Basic Accidental Death and Dismemberment – Schedule of Losses Other Than Death

Accidental Death and Dismemberment – Any loss (other than death) due to an accident based on the schedule of losses outlined in the insurance policy

Who it happens to: Employee

What is payable: A percentage of the amount payable under the Accidental Death benefit

Comments: 50%-75% for one limb, 100% for two limbs, 200% to 400% for paralysis

 

Voluntary Accidental Death and Dismemberment

Voluntary Accidental Death and Dismemberment - Death

Accidental Death and Dismemberment – Death from an accident

Who it happens to: Employee, Spouse or Child

What is payable: Amount chosen by employee typically provided in units of $10,000 or $25,000

 

Voluntary Accidental Death and Dismemberment – Schedule of Losses Other Than Death

Accidental Death and Dismemberment – Any loss (other than death) due to an accident based on the schedule of losses outlined in the insurance policy

Who it happens to: Employee, Spouse or Child

What is payable: A percentage of the employee amount

Comments: 20% to 60% of employee amount

 

Short Term Disability

Short term disability due to an sickness, accident or hospitalization for a specified duration (usually outlined as a number days)

Who it happens to: Employee

What is payable: A weekly income replacement benefit

Comments: 50% to 100% of weekly salary up to a maximum, for a specified period of time outlined in weeks. Typical coverage is 17, 26 or 52 weeks.

 

Long Term Disability

Long term disability for a specified duration (usually outlined as a number months)

Who it happens to: Employee

What is payable: A monthly income replacement benefit and waiver of premium

Comments: 50% to 75% of monthly salary up to a maximum, for a specified period of time fixed in years or to age 65. Under the waiver of premium provision, both the employer and employee are exempt from paying life insurance premium while an employee is disabled.

 

Health

Insured incurs expenses related to health insurance coverage including prescription drugs, paramedical practitioners, medical supplies and services, hospital and vision care

Who it happens to: Employee, Spouse, Child

What is payable: Any eligible health expenses according to the insurance policy subject to deductibles and maximums.

Comments: Typically 70% to 100% reimbursement of eligible expenses subject to deductibles and maximums.

 

Dental

Insured incurs expenses related to dental insurance coverage including basic restorative, minor restorative, diagnostic/preventative, endodontic, periodontal, major restorative including crowns, bridges and dentures and orthodontic procedures

Who it happens to: Employee, Spouse, Child

What is payable: Any eligible dental expenses according to the insurance policy subject to deductibles and maximums.

Comments: Typically 80% to 100% reimbursement for basic and diagnostic/preventative services, 50% to 80% for major services subject to annual maximums of $1,500 to $2,500 of eligible expenses subject to deductibles and maximums. Orthodontic procedures typically covered at 50% to 60% subject to a lifetime maximum of $1,500 to $2,500.

Category: Group Benefits