Most of us know that purchasing a life insurance policy is important, because it guarantees some form of income to your family in the event that something happens to you. But what if that “something” isn’t death, but a form of disability? A disability can come from an accident or it can come from an illness. Many people have found themselves unable to work due to disability. The medical bills roll in as well as your day to day living expenses. How do you replace that lost income? A disability insurance policy can protect you against this exact situation.
But of course, much like purchasing life insurance, choosing a disability insurance policy can feel a bit like navigating a maze of options. These six tips can help you sort them out.
Choose a reputable insurance company. If the company is no longer in business when you become disabled, that insurance policy won’t help you.
The definition of “total disability”. Before you can claim your benefits, your disability would need to fulfill your insurance company’s definition of “total disability”. Insurance companies vary in how they define total disability, so be sure to look closely at that part of the policy.
Consider the residual disability benefit rider. Most likely, you don’t want to become disabled and need to claim your benefits. So, like most people, you would probably fight to recover from an accident or serious illness. If you chose a residual disability benefit rider, you can claim a portion of your benefits while continuing to work, if your disability has resulted in a partial (but not total) loss of income.
If you already have a serious condition, your insurance options might be limited. Unfortunately, if you don’t shop for a policy until after you have developed a serious condition, you usually won’t be able to access full protection. It would be like shopping for flood insurance while your area is currently flooded! However, you might be able to enroll in a graded policy, in which your scope of benefits gradually increases the longer you are able to continue working.
Young people should consider the future increase rider. Let’s say you’re young and healthy, but you can’t afford a lot of coverage just yet. If you choose the future increase rider, you can increase your coverage amount later, when you’re making more money – without having to show proof of your health status.
Premiums will vary. As with any other form of insurance, your premiums are based on your level of risk. So your disability insurance premiums will be partially based on things like your age, sex, health history, occupation, and so on.
Choosing a disability insurance policy is a complicated process. The above tips can get you started, but nothing can replace the guidance of an expert. So give us a call, and we’ll be happy to answer your questions, and help you locate the policy that fits your needs and budget.