Disability Insurance Articles
How To Spot A Good Disability Insurance Quote
2010-08-11
When seeking a quote for disability insurance, it can be tempting to evaluate the quality of the quote based on disability insurance premiums alone. However, the quality of disability insurance is found by assessing the overall value of the policy benefits as compared to the costs, rather than simply assessing cost as a stand-alone assessment tool. Disability insurance is designed to support the insured through the significant change in life circumstances that happens as a result of long term injury or illness. It is only as useful as the benefits it provides in the situation where disability arises. Disability insurance premiums offer some flexibility in designing a good disability insurance quote that will meet the insured's budget and needs.
The first area where a good disability insurance quote can be readily spotted is in how disability itself is defined. There are two main ways disability can be defined-"any occupation" and "own occupation." Own occupation, while often more expensive, is less restrictive in terms of benefit payouts. Own occupation refers to the insured's inability to perform the occupational tasks of the position held at the time that the disability occurred. This is a more a comprehensive benefit than "any occupation," which instead seeks to verify that the insured cannot perform any gainful employment before benefits will be paid.
The next area that signals a good disability insurance quote is found in the policy's renewal procedure. The best policies will have an auto-renewal clause that stipulates automatic renewal indefinitely up to the maximum time and payout limits, as long as premiums are submitted in full and on time. This prevents benefits from being cancelled while there is still need for them. Also, quotes that feature shorter waiting periods, also often called elimination periods, are more valuable in the case of a disability because they shorten the time frame between on onset of the disability and when payouts will begin.
Finally, good disability quotes will not promise the sun, moon and stars, but rather will conform to industry standards for monthly caps, time limits and payout amounts. While different insurance providers may handle the amount of benefits as either a percentage of lost income or a flat payout, the most an insured can typically expect to receive is 70 percent of lost income, with the average being around half of lost income. Policies that conform to industry standards, are from well respected providers and offer the benefits of shorter elimination periods, automatic renewals, and the "own occupation" definition of disability, are highly valuable and well worth their price tag in the event that a disability occurs.