Disability Insurance Articles
How To Control Your Disability Insurance Premiums
2011-11-10
Your disability insurance benefits will control your disability insurance premiums. When you're trying to reduce your monthly premiums, getting a grasp on your benefits and potentially reducing your coverage can help you control your monthly expenses. It's important to have disability insurance because you never know when you'll need to go out on temporary or permanent disability. The disability insurance benefits that you have in place can vary dramatically from company to company, so you need to know what you have.
One of the main things to look at with disability insurance is what percentage of your salary will be paid upon going on disability. The average percentage is about 60%; however, this can go up or down depending upon the company that you're doing business with. If you want to control your premiums, make a call to your insurance company to find out what your current percentage is. See if you can reduce the percentage to lower your premium.
Another thing to look at is to see whether or not there is a clause within the policy to increase the amount of benefits based upon cost of living increases. If you're making $50,000 a year, your policy will be priced to reflect this. After all, a person making $50,000 a year and a person making $100,000 a year will be paid different disability amounts. It is therefore only fair that their rates are different, too. If you suddenly get a pay raise to get you to $55,000, however, you need to make sure your policy doesn't go up too much.
There are many policies through many different companies that will automatically give you an increase after so many years of doing business with them. This helps keep you premiums in line and protecting yourself at the same time. One of the best ways to control your premiums is to shop around for the best policy to start with. Call three or four insurance companies to find out what kinds of policies they have. Ask about cost of living increases and the percentage of your salary that they'll pay. These are the two largest factors to determining your monthly premium.
Every company charges a little differently and it should be your goal to find the lowest rate possible. The only way to know the lowest rate is to do some comparisons. This can be done online or with the help of an insurance broker. At the end of the day, the only way you can control your disability insurance premiums is to know all the details of your policy. Asking questions and comparison shopping can go a long way.