The national guide explains how disability income insurance works: own-occupation and any-occupation definitions, elimination and benefit periods, residual and partial benefits, presumptive disability, waiver of premium, riders, and business uses such as key person, buy-sell and business overhead expense. Connecticut adds minimum standards for disability coverage in Regs. 38a-505-5 and 38a-505-9.

The national concepts in brief

• The elimination period is a waiting period, measured in time, before benefits start. The benefit period is the longest time benefits are paid for one disability.
• Residual disability pays a partial benefit in proportion to the income lost while the insured works at reduced capacity.
• Presumptive disability treats severe losses, such as loss of sight, as total disability regardless of work.
• Business overhead expense coverage, listed on the Connecticut exam outline, reimburses ongoing business costs such as rent and utilities while the owner is disabled. It does not pay the owner's salary.

Connecticut minimum standards

• Residual disability must be defined in relation to the reduction in earnings (Reg. 38a-505-5(K)).
• Maximum elimination period (Reg. 38a-505-9(F)):

• Benefit period: at least six months, or one month for pregnancy-related disability coverage (Reg. 38a-505-9(F)(3)).
• After age 62: if benefits are reduced at 62, they must still be at least 50% of the pre-62 amount (Reg. 38a-505-9(F)(1)).
• Recurrent disability: the separation period may not exceed six months (Reg. 38a-505-9(A)(10)).
• Blindness: refusing coverage or charging a different rate solely because of blindness or partial blindness is unfair discrimination (38a-816(13)).

Exam traps

• The longest elimination periods are 90, 180 or 365 days, depending on the benefit period.
• Benefits reduced after 62 can't drop below 50%.
• Business overhead expense pays business expenses, never the owner's own income.