Do You Need it?
Disability insurance is a product that is designed
to replace a portion of your income in case you are hurt in an accident,
or get an illness and cannot work for a period of time. Think it
can't happen to you? Consider these statistics:
* Between ages 35 and 65, 7 out of 10 people will
become disabled for 90 days or longer
* The leading cause for disabilities is back related, followed
by psychiatric and emotional disorders
* 7 out of 10 claims for Social Security disability benefits were
* At age 40, you have a 21.8% chance of dying, but a 29.1% chance
of being disabled
Modern medicine has allowed us to successfully combat
many conditions that killed us 10 years ago. Even with these advances
in health care, it is not likely that we will never miss a day of
work. Disability insurance is there so that when we do miss work,
we can still pay the mortgage and put food on the table.
What to Look for in a Disability Policy
When you are buying a disability policy, there are
many important factors. One of the largest things to consider is
the definition of disability - what does the insurance company consider
a disability? There are three main definitions available today.
- Own Occupation - This it the best definition of
disability available. It means that if you suffer an accident or
illness that prevents you from working in your occupation, you will
get paid, even if you can work in another job.
- Modified Own Occupation - This is an income replacement policy,
and is one step down from a true own occupation policy. If you return
to work in another position, the insurance company will reduce or
eliminate your monthly benefits.
- Any Occupation - This is the worst definition available. If the
insurance company decides you can perform any occupation, they will
not consider you disabled. Keep in mind that many policies start
off as a modified own occupation definition for a period of time
(2-5 years), and then revert to this any occupation definition.
This is very typical of group LTD policies which people have at
Be sure that the coverage also has provisions for
partial or residual disabilities, cost of living adjustments, and
is non-cancelable and guaranteed renewable. Having a policy that
is non-cancelable and guaranteed renewable means that the premiums
are fixed until age 65, and the insurance company cannot change
any of the provisions of the policy or cancel the coverage.
No two disability policies are the same. Because of this, you cannot
base a decision on price alone. Generally, a cheaper contract will
not pay you in as many situations as a more expensive one. The better
contracts cost more because they are more comprehensive.
Commissioner's Disability Table, 1998
HIAA Source Book of Health Insurance Data 1999-2000
Senate Finance Committee, 1998
No two disability policies are the same. Because of
this, you cannot base a decision on price alone. Generally, a cheaper
contract will not pay you in as many situations as a more expensive
one. The better contracts cost more because they are more comprehensive.
Many people think that their most valuable asset is
their home, car, or retirement account. They are wrong. The most
valuable asset that we have is our ability to earn an income. Doesn't
it make sense to protect this asset with the most comprehensive
form of coverage possible?
Request a quote now, and one of our licensed agents
will prepare your own occupation disability quote and email it to
you. You will also receive additional information on the policy,
disability insurance in general, and how to purchase you coverage.