Where to Buy Disability Insurance
Disability insurance may not always be a necessity, but when the time comes you are unable to work due to an accident, it can be a lifesaver. It’s important to know that not all disability insurance policies are created equal. Some will have better monthly rates and coverage than others. Here are some tips on where to find the best disability insurance companies.
Identify What Type You Need
Yes, disability further branches out into several types, mainly Short-Term Disability and Long-Term Disability. The key difference between the two types of disability policy is the waiting period. Short-term disability policies usually take between 0 to 14 days while a long-term disability policy can take upwards of several months. The maximum benefits are also longer for LTD than it is with STD.
Narrow Down to Important Features
Every disability policy will have one of two features – noncancelable and guaranteed renewable. The former, as the name implies, does not allow you to cancel the policy except in the event that monthly premiums are not paid. This protective feature also allows you to renew the terms of the contract annually without expecting premiums to rise or benefits to drop. A guaranteed renewable feature, on the other hand, enables policyholders to renew the contract and not have it cancelled by the insuring party.
Know the Optional Features
For those with spare time and/or specific situations, there are additional options for purchasing a disability insurance policy. These include coordination of benefits, adjusted cost of living, premium refund, and partial disability rider. Knowing the specifics of these optional features allows you to tailor your disability policy to your needs and circumstance.
Consult Your Employer
A common reason for needing disability policy is a workplace-related accident. Thus, it makes sense to ask your employer first about insurance provisions. Depending on your employer, you can find several subcategories that may or may not be separate components of your initial benefits package. This encompasses worker’s compensation and general disability benefits. In addition, see if you are eligible for a group plan that’s also provided by your employer. Keep in mind that employer-sponsored disability payouts are taxed, which ultimately lower the actual cash you receive.
Check the Elimination Period
When selecting from the best disability insurance companies, check their respective policy’s elimination period. This pertains to how long a policyholder can be completely disabled before the insurance starts paying out money. It can be a grueling wait for people who fail to plan ahead and seek the right elimination period. If you have enough funds in savings to last for up to half a year, you can and should look for a longer elimination period and benefits period.
Buying disability insurance shouldn’t be a protracted, complicated process. After all, if you are shopping for one, you’re already in physical or mental pain and don’t really need the extra pressures of having to shop for the right policy. The guide above should assist you in handpicking the right insurance provider and policy.