Seeing the importance of having disability insurance, how do we choose? When we do not have any company or military disability insurance coverage, we need to choose our own individual plan.
Here are some tips when choosing or looking for the best policy.
- Put quality ahead of the price. For a good individual disability insurance policy, expect that you will be paying 1 to 4 percent of your income.
- Make sure to read the contract before buying the plan. Disability insurance contracts clearly state when a claim will or will not be paid.
- Check the company background. They could be providing your income for the next 15 to 20 years. Make sure that they are financially stable.
- Check third party ratings done by other companies. Look for the best options.
If choosing a group plan. Make sure that you know the details or understand what is written in the contract. There are some tendencies that group plans get changed or cancelled at any time. There are also group plans that cannot be taken with you when changing employers.
Be familiar with the policy’s definition of disability. This is to identify if they have restricted or broad coverage. There are some policies that require the insured be completely disabled before providing the benefit. Make sure that the policy will work in your occupation.
Look for a disability specialist just to be sure that they really know and understand the contract. A policy with a 90-day waiting period will cost substantially less than one with a 30 or 60-day period. Increasing the period beyond 90 days does not reduce the premium very much.