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LSDefine
Simple English definitions for legal terms
disability clause
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A quick definition of disability clause:
A disability clause is a part of a life insurance policy that says if the person who bought the policy becomes disabled and can't work, they don't have to pay the premiums anymore. Sometimes, the policy will also give the person some money every month based on how much the policy is worth.
A more thorough explanation:
A disability clause is a provision in a life insurance policy that allows the policyholder to waive premiums during a period of disability. In some cases, the clause may also provide for monthly payments equal to a percentage of the policy's face value.
John has a life insurance policy with a disability clause. He becomes disabled and is unable to work for six months. During this time, he is unable to pay his insurance premiums. However, because of the disability clause in his policy, his premiums are waived, and his coverage remains in effect. Additionally, he receives monthly payments equal to a percentage of his policy's face value to help cover his living expenses.
This example illustrates how a disability clause can provide financial support to policyholders who become disabled and unable to work. It ensures that their life insurance coverage remains in effect, even if they are unable to pay premiums, and provides additional financial assistance to help cover their expenses during a difficult time.