It is often said by the most experienced professionals that the best company policy is the one that is in-force at the time you become disabled. Meaning no matter what you do to decide on a policy, make sure at the end of your decision process you do make a purchase and protect your income. The other part of this statement is to make sure the company you are buying from has a very strong financial history, and top ratings from all of the major ratings agencies.
2. The Definition of Total Disability Is a BIG DEAL!!!
If you ever become too sick or injured to perform the duties of your occupation, it is the “definition of total disability” found in the policy that is going to determine whether or not you are deemed to be disabled by the insurer during your claim. The most comprehensive definition of total disability available today is known as “own-occupation”.
3. Look For Discounts Everywhere
Medical and Dental associations are notorious for offering discounts in almost every state. Just about every state bar association is also offering a discount to their members. Experienced agents keep lists of available association discounts, and can utilize that list to make sure you get the best possible rates. Many times you can also get a discounted policy if a couple people in your office sign up at the same time.
4. Always…. I Repeat “ALWAYS” Buy The Enhanced Partial Disability Benefit Rider
Some carriers offer this as an optional rider, and some carriers make residual (or “partial benefits”) a part of the base contract. Most disabilities are illness claims, not accident claims2. When most illnesses onset, they don’t hit you like a ton of bricks. It takes time for a person to become too ill to perform the material and substantial duties of their occupation.
Most successful people tend to fight their illness in hopes of being able to keep working. This is where a partial disability rider is very important, it allows an insurance company to pay you a portion of your monthly benefit while you are still working, so long as you demonstrate a loss of income of more than typically 15% or 20% because of the disability. Some riders can also allow the insurance company to pay you partial benefits during your recovery from an illness or accident.
5. Expect To Spend Between 1-3% Of Your Annual Income
There are no two disability insurance policies on the market that are the same. Each policy is made up of a series of different benefits and features designed to provide different levels of coverage. Some policies are going to be more expensive than others, and the price is going to be reflective of just how comprehensive your level of protection is going to be. The price will also more or less depend upon many factors including your age, occupation, sex, health history, amount of coverage, state, and optional riders.
6. Evaluate Your Agent Early In The Process
Just because an agent is knowledgeable in life insurance, investments or annuities does not mean they are knowledgeable in DI. Just ask them what the differences are between a pure own-occupation, modified own-occupation, and gainful occupation definition are…then listen to their answer. If they stumble here, I would suggest finding another agent who understands what different carriers are offering, to make sure you get the best contract available to you on the market.
7. If You Are Buying Disability Insurance Because Of A Serious Medical Condition… Your Options Are Limited.
Unfortunately many people wait until they are diagnosed with a serious medical condition before they attempt to buy their own individual policy. The most comprehensive policies in the market are no longer available to these people, it would be like trying to buy flood insurance on a home next to the Mississippi River after a levy broke.
8. If You Are Younger, Maximize Your Future Increase Option Availability
Many policies allow you to buy an optional rider, sometimes referred to as a “Future Increase Option”. This optional rider provides a specific amount of future insurance you can purchase should your income increase without the need to provide further evidence of good health.3My suggestion to people in their early working years is to buy the maximum amount you can.
9. Ask Lots of Questions, And Do Research On-line.
Nobody expects you to become an expert before you buy a policy, but make sure you understand the basics of what you are purchasing. Ask a lot of questions, and if your agent is not giving you quality answers just work with a new agent. You can find disability insurance agents online, or just do a search on Google for a local agent. There are also a multitude of resources available to you online to help you understand individual disability insurance a little more.
10. Get The Best Disability Insurance Policy In The World!!!
Like I mentioned at the beginning of this article, there is a “Best DI Policy In The World”, and it is the one that is in-force at the time you need it. Don’t be the analytical who spends a year analyzing all the various carriers options, and ends up getting diagnosed with diabetes while he or she is deciding which option to buy. The honest truth is the vast majority of DI carriers offer quality contracts, and you aren’t going to make a huge mistake buying any of them.
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