Things not to forget when buying Disability Insurance
In your lifetime, you are three times more likely to become disabled than you are to die before age 65. Historically people have been more likely to buy life insurance, and not disability insurance. People are confused by disability insurance, which results in people doing nothing.
If this sounds like you, check out this article and look at buying disability insurance in a whole new light.
Understand your Personal Disability Quotient
By visiting WhatsMyPDQ.org you can assess your ‘personal disability quotient’ (PDQ). This is a free service provided by the Council of Disability Insurance. Your PDQ will predict the possibily of you needing to use disability insurance during your lifetime.
Is it ok to buy your own policy or get it through work?
Clark advises that people who make more than $200,000 a year buy their own disability insurance policy. If you make less than $200,000, then you want to take a group disability policy through your employer.
People skip buying disability insurance, thinking that Social Security disability will help them if it is needed. Social Security disability will not help. It doesn’t pay much and is more difficult to qualify for than a group policy provided through your employer.
When you’re considering buying disability insurance, it’s good to do background reading on this kind of policy. The Wall Street Journal recommends sites like Disability Insurance Resource Center and Disability Insurance Quotes as good unbiased sources of info.
Find an insurance agent
Whether you use the sites mentioned above for a quote or you decide to look elsewhere, most importantly: You’ve got to find more than one quote. Get an insurance agent who can give you quotes from multiple providers. Policy Genius and Disability Insurance Services are good starting points to find a broker.
Get a disability policy that makes payments three to six months after you are disabled and continues until age 65. Buy coverage that’s equal to 60% of your current pay before taxes because that will match what you’re taking home after taxes.
Make sure the insurer is strong
Consider companies that have been rated ‘A++’ by A.M. Best, which means they are of the highest financial strength.
Insure your policy covers your profession
Whether you’re a physical therapist or a construction worker, be sure that your policy covers your skill set. This is important in case you are unable to perform your specific job duties.
Determine if you need high-limit disability insurance
High-limit disability insurance is traditionally limited to sports figures, entertainers, highly compensated business professionals and physicians/surgeons. Pro Financial Services (PFS) is one company that offers these policies through it relationships with underwriters like Chubb, Everest and Lloyd’s of London.
Get a final opinion before signing
Buying disability insurance is an important decision. You will want another set of eyes to look at the policy terms to make sure everything is up to standard. This is where a disability claims consultant comes in. They’ll help you make sense of the policy and make sure it’s in your best interest. Research disability claims consultant in your area and pay attention to the reviews.
This is one of those things you hope you never need. But you will be glad you have it through your employer because it will protect your loved ones and you as well.