Buying Tips For Disability Insurance:



Before choosing disability insurance, remember these tips:
  • Shop among low-load (commission) disability insurance plans.
  • If you’re young, weigh the difference between the annual renewable disability income policy and fixed premiums.
  • If you're older, from an convert to a permanent disability insurance policy. Try to get group coverage from a trade association or other organization you belong to.
  • If you’re female, look for an disability insurer that has unisex pricing, so some of the higher costs of insuring women are absorbed by the men.
  • Always ask about any discounts that may be available.
  • Make sure you can prove your income level, since disability insurance usually only pays a maximum of 60% of your gross income.
  • Avoid any-occupation disability insurance coverage if you can, as it pays benefits if you can’t work at any occupation for which your education level and training has prepared you (choose Own-occupation or an Income-replacement policies)
  • Get a disability insurance policy waiting comparable to your sick leave, short-term disability, and an emergency fund.
  • If you are older, get a disability insurance benefit period that lasts until age 65, if possible
  • If you are younger, consider a disability insurance policy with lifetime benefits, if you can afford it
  • Avoid disability insurance policies that only cover you for two to five years, unless you qualify for SSI (Age 65)
  • Make sure your disability insurance policy states (or add it as a rider) that you are entitled to residual benefits, if not, you won’t receive anything unless you are totally unable to work.
  • Get a disability insurance policy that is "non-cancelable," so you will pay a fixed premium throughout the contract term.
  • If your disability insurance plan is "guaranteed renewable," your premiums could go up.
  • Consider a Social Security rider, so if you qualify for Social Security disability, the insurer gets to decrease your coverage (and your premiums are lower).
  • Consider the Waiver-of-Premium rider that allows you to stop paying disability insurance premiums once you become disabled.
  • Avoid the Return-of-Premium rider, this option can double your disability insurance premium. Don't buy disability insurance if you are only planning to cancel.
  • Consider an increasing coverage rider that gives you the ability to buy more disability insurance coverage without being turned down for health reasons. Your income may increase as your skills do.
  • The cost-of-living rider, which can add 20 to 40% to your disability insurance plan's premium, pays you a higher benefits to offset inflation.



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