di done right consumer articles

Your Most Frequently Asked Questions about Disability Insurance 

Q: Who needs disability insurance?

A: Anyone who works for an income needs paycheck protection and should consider getting a disability insurance quote. In fact, it’s a good idea to obtain several disability insurance quotes for coverage and pricing comparison.

Q: Is my long-term disability plan through my company sufficient?

A: Applied to just base compensation, standard short-term and long-term disability benefits leave most people dangerously underinsured. Also, those plans are fully taxed. To fill the gaps, you need personal disability insurance. Statistics show that every year, 350,000 personal bankruptcies are attributed to injuries and unexpected illnesses. (Source: “Illness and Injury as Contributors to Bankruptcy,” Health Affairs, 2005) Individual disability insurance helps pay items like your mortgage and other expenses that company plans do not cover.

Q: What is the definition of disability?

A: Own-occupation disability is often defined by many companies as: “…because of injury or sickness: You are unable to perform the substantial and material duties of Your Regular Occupation; and you are under the care of a Physician appropriate for Your Injury or Sickness.”

Q: How much of my income can I insure?

A: Each disability insurance carrier’s Issue and Participation Limit determines all benefit levels. Typically, benefits protect 60 to 70 percent of your income. To prevent “over-insurance,” limits are set. Benefits are usually tax-free and the majority of companies issue benefits with a cap of $15,000 a month. This is a very low percentage for those who are highly compensated for their work. However, we are known for our creative solutions and we commonly place coverage of up to 75 percent of compensation with no monthly limit for highly paid individuals.

Q: How can I tell which waiting period is right me?

A: The waiting period (or elimination period) for a disability insurance policy is the number of days between the time of total disability and the time benefit payments start. Typical options range from 60, 90, 180 and 365 days. To determine the right waiting period for your policy, consider the type and amount of funds you have on hand in the event of a disability. Also, think about cost. Policies with longer waiting periods cost less than those with shorter elimination periods.

Q: What should I consider when determining which benefit period is right me?

A: The benefit period for a disability insurance policy is defined as the period of time your policy pays benefits. Benefit periods may be two years, five years or up to retirement age of 66 or 67. Policies with longer benefits cost more than those with shorter benefits. No matter which period you choose, any benefit period is better than having no coverage at all. With just a minimum two-year benefit period, you could have time to recover from a disability, find a new occupation or adjust your lifestyle, without worrying about financial devastation.

Q: What does Own-Occupation mean?

A: Perhaps the most important definition when insuring someone with a highly specialized occupation, Own-Occupation (Own-Occ.) is important to understand. For example, if a surgeon is disabled and can no longer perform surgical procedures but he could work full time as a general practitioner, under the “Own-Occ.” provision he would qualify for full disability benefits.

Q: Which medical exams do I need?

A: Similar to applying for life insurance, underwriters review your medical history. Once the review is complete, you may also need to provide blood work and have an exam.

Q: If I have a health problem, can I still get a disability insurance?

A: Just because you have a health problem or a history of health problems doesn’t mean you will automatically be denied disability coverage. By shopping around and obtaining disability insurance quotes from a disability insurance specialist, you may be able to secure quality coverage at an affordable price.