Disability insurance is going to provide benefits to the insured who is disabled as a result of illness or accident. This certainly means that the policyholder is unable to perform normal work duties. If you are the policyholder then you will receive a portion of your income that doesn’t exceed 60%. You have to pay premiums that range between 1.5% and 3% of your gross income. If you want to choose the best disability insurance then we have come with a few considerations that will help in choosing one.
How to Choose the Best Disability Insurance
There are several factors that go into deciding, how to choose the best disability insurance. And they are listed as follows:
#1: Is your disability insurance cancellable or non-cancellable?
You must ask this question to the insurance provider. Whether your policy is cancellable or not. If the policy is non-cancellable you will get a greater advantage. Even if the insurance provider’s status changes or there is any other issue, the insurance provider won’t be able to cancel your insurance policy. No matter what the company has to provide you with benefits. But yes, non-cancellable policies come with high premium demands. So in order to get the required benefit you have to pay a high amount.
#2: How long is the elimination period?
The elimination period is the time period during which a disabled person is not eligible to receive benefits. It begins once policyholder qualifies as disabled. If we talk about the short term disability insurance then the elimination period is of about two weeks. Similarly, for the long term disability insurance, the elimination period is of one month to two years. If you have waited for a long time then you will get benefits for a long time.
#3: Does it offer Guaranteed Renewable?
It may happen by the end of the policy you plan to renew the same. So your insurance provider must provide you with such benefits. Some term-limited policies do come with guaranteed renewable. So they cannot deny your renewal request. The policies offer guaranteed renewable from 65 years to whole life. Generally, the guaranteed renewable feature comes with a higher policy premium.
#4: What About The Accumulation Period?
The accumulation period is the interval during which the policyholder needs to accrue sufficient cumulative that qualifies disability time. All this is done to satisfy the elimination period. In most cases, the length of the accumulation period is more than the elimination period. You will qualify for disability benefits by accumulating for non-consecutive intervals of disability that lasts for four months each. If you choose a long accumulation period then you need to pay low premiums.
#5: Does it consider the coordination of benefits?
Suppose you choose a disability insurance policy and there are other multiple sources that provide benefit to you in such vulnerable conditions. For example, you qualify for social security disability. Now, it is obvious that your benefits will increase. But, the coordination of benefits doesn’t allow you to do so. If you aim to replace $7000 in monthly income and the other sources are providing $3000 per month then the benefits will change. You will get the remaining amount through disability insurance i.e. $4000.
#6: Is it considering temporary recovery?
There are certain conditions in which the person may recover from disability between the elimination period. Again after recovering the person goes back to the same condition of disability due to underlying condition or cause. Now, the temporary recovery benefits will ensure that you can open the claim without the endurance of another elimination period.
#7: Are you getting a rehabilitation plan?
Once a person is disabled, he or she cannot do anything and the benefits don’t give him true happiness. Everyone likes going to work and earning money and the benefits do not cover everything. If the insurance policy comes with a rehabilitation plan then you get varied benefits. The plan includes physical therapy, family car, job search, and professional development fees.
#8: Does it offer a return to work incentives?
Yes, there is a high possibility that you recover after continuous therapy sessions. Now, after recovery, you won’t start earning immediately or won’t earn a high amount. So some insurance providers offer work incentives whose benefits continue for a year or two after you resume part-time employment. These incentives combine employment earnings and benefit payments to replace your 10% of the policyholder’s pre-disability income.
#9: Does it consider your accommodation benefits?
Disability insurance comes with benefits that reimburse both employers and self-employed individuals. Once you recover you need proper care so that you do not go back to your worst condition. So a few insurance policies do offer reasonable accommodations. It is to ensure after work you come back home to a comfortable house environment.
If you consider the above-given points then you will definitely choose the best disability insurance for yourself. For maximum benefits, you have to go through an underwriting process. For replacing your income they need to verify your health details. They will ask you questions related to your present and past health condition. It includes your family history, lifestyle, and habits. The companies may even ask you to go through a blood test to confirm your health condition.
If you are into some sort of bad habit that can cause a chronic health condition then the provider will demand a high premium. There are some exceptions who want access to your past medical records. It is not easy to avail of the advantages of an insurance policy. The policy providers must know about you in detail before approving a highly beneficial policy. There are multiple disability insurance providers in the market but only a few will offer the right coverage. Some of the best companies in the USA are Guardian life, Assurity, etc. You have to research a bit or consult an expert to get more information about them. If you work at a place that may be disastrous in the future, you must opt for disability insurance. It will make your life easy in the longer run.
In case, you have doubts about disability insurance then contact us for the same. We will reply as soon as possible.