Disability Insurance Articles
How Recent Insurance Hikes Have Affected Disability Insurance Programs
2011-04-21
In difficult economic times, insurance hikes are not at all uncommon. Banks have less money to lend and insurance companies become much more conservative with their insurance policies, so it's common for premiums to rise significantly. This extends to disability insurance. Disability insurance programs can change significantly as a result of poor economic conditions and changes in supply and demand, and in recent years, this has certainly been the case. Buyers interested in disability insurance programs should take the time to understand how these insurance hikes could affect their options.
One of the most significant changes in the disability insurance market is the cost of coverage as it relates to waiting periods. In order to get extended amounts of disability insurance, buyers have to opt for policies with longer waiting periods than what would have been available several years ago. This is important because the waiting period of disability insurance programs works in much the same way as a deductible for another type of insurance. It's a measure put in place by the insurance provider to help avoid potentially high payouts. Basically, a long waiting period means that a person would have to be disabled and unable to work for an extended period of time before seeing any benefits from their policy. The longer the waiting period is, the lower the value of the policy, but the economy has forced many buyers to consider policies with long waiting periods as viable options.
Benefits have also dropped significantly and many newer disability insurance policies carry lifetime or annual maximums that are far below what their buyers might have expected several years ago. Disability insurance providers can afford to take fewer risks. Some buyers may even have difficulty in finding a disability insurance policy in the first place thanks to insurance hikes, especially individuals who work in traditionally dangerous occupations where a disability could be considered to be more likely. Even buyers with low-risk jobs need to stay in shape and get regular check-ups to avoid potentially high premiums.
However, there is some good news. Disability insurance policy holders can gain control of many aspects of their policies by leveraging the competition of the insurance industry to their advantage. Buyers should always look for disability insurance quotes online before buying a new policy and especially after noticing any change in their rates, for better or worse. Studying the competition in the disability insurance industry is one of the fastest ways to lower insurance costs and ensure a great policy with decent coverage, even in harsh economic times when industry-wide insurance hikes are an unfortunate reality for disability insurance buyers everywhere.