DISABILITY INSURANCE: How Do I Know What To Buy?

There are many disability insurance policies on the market. The most important thing, however, is what is important to you?

There are some policies that are fully comprehensive in their coverage. They naturally cost more than the ones that only cover a few conditions. Just like anything else, you usually get what you pay for. The better or more comprehensive the policy, the more control you have of the policy.

Is control important to you?

We can best demonstrate what kind of policy is right for you by asking a few questions that a knowledgeable broker will ask you.

• Do you wish to be covered for ANY disability, no matter what the cause? Did you know that over 40% of the claims are for other than accidents and illness? Perhaps the policy you have now you only have a 60% chance of all disabilities of claiming on from the get go.
• What is more important, to have only a two year benefit period and have return of premium or have no return of premium and be covered to age 65?
• Is it acceptable to you if the company is able to raise the premium when they want to?
• Is it acceptable to you if the insurance company is able, after you are disabled, to cease your benefits if you can later do any other type of job?
• Is it acceptable to you if they cancel your coverage if you change jobs to a more hazardous occupation?
• Early onset Alzheimer’s usually starts before age 65. What does your policy say about this extreme disability?
• We all too often hear about a couple’s child being abducted with heart wrenching results. What effect would you say that would have on the parents? Could they become disabled as a result? How?
• What is the policy’s definition of disability? What does it mean? Why is it important?
• Once disabled, does your monthly benefit rise with inflation each year? If not, your benefit will have less buying power each year.
• Does your policy allow you to buy more coverage if you need it in the future without any problems even if your health changes for the worse?
• Are you aware that with most group employee benefit plans your benefits can be terminated after two years of payments? What then?
• Does your company underwrite at the time of application or the time of claim?
• Have you ever cancelled one policy because you were told the new one is much better and much cheaper?  How often is something much better AND much cheaper? Ask a broker who sells non-cancelable insurance to compare for you.
• Does your policy have benefit time limits on and for specific injuries?
• Disability insurance is the insuring of income. Becoming disabled is what triggers the policy to pay out. The benefit amount is based on your income. Only income shown on your tax return (T1 Return) each year is accepted by insurance companies. (Have your previous two years returns available for your broker when you discuss this with them. If you are reporting $12,000 or less let them know immediately.)
• If you are taking any kind of stress or anti-depressant medication, let your broker know immediately.

It is very important that you are able to answer these questions completely and accurately in order for you to make a critical decision on just what type of disability policy is right for you.