Purchasing disability insurance is a big deal. Since it is an important decision, you want to make sure you’re asking the right questions.
If you’re new to all this, that’s okay. A lot of people are in the same shoes!
So that you fully understand the policy you’re getting, don’t be afraid to ask a bunch of questions.
Here are five questions to ask an insurer. Ask questions like this, so there won’t be any confusion before signing on the dotted line!
The best policy is a long-term disability insurance policy. Most long-term policies cover up to 60% off your gross salary tax-free. That means if you put in a claim, you’d get close to what you’d take home while working.
There’s also the option of getting a short-term policy. This type of policy means you’ll get covered for a shorter period, usually anywhere from 30-90 days.
Keep in mind that everyone’s circumstances are different. It’s essential to do your homework and ask insurance companies questions. They can provide more details about the policies they offer. They’ll also be able to give a detailed explanation about the insurance differences.
The elimination period is how long you have to wait until you receive benefits from your policy. So if you were to get injured, it would be the day you got injured until the day you started to receive money.
Finding out what your elimination period would be is essential. Some policies have longer waiting periods.
If you’re able to go a while without receiving benefits, then it shouldn’t be that big of a deal. But if you live paycheck to paycheck, it’s best to get a policy where the benefits would kick in as soon as possible.
Before making a decision, find out what their definition of total disability is. Some policies offer benefits when you’re unable to work from your primary occupation even though you choose to find work elsewhere in the meantime.
Consider a true own-occupation disability insurance policy if you want the most benefits. This type of policy is excellent for covering you from a range of situations. Having restrictions that you weren’t aware of when getting injured is frustrating. Go in with both eyes open by making sure you understand how your benefits and coverage will work.
There are two options for disability insurance. They are non-cancellable and guaranteed renewable or guaranteed renewable.
With guaranteed renewable insurance, as long as you don’t forget to pay, your policy won’t get canceled. But your premium can increase as time goes on. This type of policy is less expensive but may end up costing you more money over time.
Whereas with a non-cancellable policy, a company can’t cancel, reduce the benefits, or increase the premiums as long as you pay your premiums.
If you’d like the option to purchase more insurance in the future, add an optional rider to your policy. An optional rider means you can add more benefits regardless of your health status.
The rider to add is called the Future Insurability Option (FIO). An FIO is handy if you want more benefits because you’re leaving your existing place of employment.
Or, if your salary increases, FIO will make it possible for you to get covered more. So, for example, if you got ill, you’d get full insurance payment for your new salary and not your previous one.
Disability insurance is something that no one should be without. Even if you think getting injured is unlikely, having insurance gives you peace of mind. Plus, if you have a family, it’ll help to know you can take care of them even if you can’t work.
Whether you get short or long-term disability insurance, ask all the right questions. The goal should be for you to feel confident in your decision and the company you’re purchasing the policy from.