Disability Insurance Articles
4 Ways To Improve Your Disability Insurance Coverage
2010-08-13
When seeking lower premiums on disability insurance coverage, the most important key to success comes through understanding how disability insurance policies work and why they are needed. Most often, individuals in search of insurance ignore the importance on disability insurance. However, disability insurance coverage can prove invaluable in the event income is lost due to a long term illness or serious injury. In such a circumstance, those individuals with disability insurance will view the premium costs as one of the wisest financial decisions that they ever made.
Finding lower premiums, therefore, is not about attempting to assess the likelihood that such a policy might ever be needed, but rather, strategically selecting the policy that will truly serve the needs of an individual who may someday be faced with a serious illness or long term disability. Here are four simple ways to finding lower premiums and improving the quality of disability insurance coverage before the day comes when it may be needed. The first way to improve the quality of insurance coverage is to elect to purchase the policy with after-tax rather than pre-tax dollars. This avoids having to pay federal income tax on the cost of the disability insurance policy, making it more valuable. Next, investigate whether employer-sponsored disability insurance coverage is available. The employer can take advantage of the ability to purchase a group policy to keep premium costs lower.
The third way to get better disability insurance coverage is to understand all the options presented at the time of purchase. For instance, the waiting period elected at the time of purchase is a major determinant of the premium costs. Ensuring that there are adequate emergency funds in order to afford a longer waiting period can keep premium costs low while still benefiting from an excellent policy when it eventually kicks in. Also, a key to obtaining better disability insurance coverage is to ensure that the policy is renewable and non-cancellable. These important clauses govern what happens if the policy is needed on a longer term basis than initially anticipated. The insured will want to seek a policy that stipulates non-cancellation as long as premiums are paid on time and in full.
Finally, before purchasing disability insurance, it is critical to understand how the insurance provider defines "disability." Disability can be viewed in two distinct ways-"own occupation" or "any occupation." Own occupation is more desirable in terms of the purpose for which disability coverage is being purchased-to provide the insured with financial support in the event that performance of occupational duties is no longer possible. Following these four simple guidelines will yield a disability policy that is well worth the money and time invested in its purchase.