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3 Questions To Ask Before Buying A Disability Insurance Policy

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Most insurance policies read like a foreign language. That's why trying to determine the right kind of disability insurance policy - or knowing if your current policy is really sufficient - can be confusing.

Here are three important questions to ask before buying a disability insurance policy or while reviewing your current coverage. 


1. How is "income" defined in the policy?

Individual disability insurance policies may insure many sources of income - such as salary, bonus, commission, overtime, and even retirement plan contributions.

However, most group LTD policies are not as comprehensive. You may discover that some additional forms of income are not covered under an employer-sponsored policy, therefore further limiting your benefit amount.

Review the policy language carefully and determine what income will be insured. If a group LTD policy will not provide enough salary coverage to help you pay your expenses, consider an individual policy instead. You can also supplement a group LTD policy with individual disability insurance to bridge the gap.

2. How is disability defined in the policy?

There are two elements of defining disability that will determine your benefits:

  • Does the policy have own-occupation language or any-occupation language?
  • How does the policy define partial disability vs total disability?

Under own-occupation language, you are considered disabled if you are unable to perform the material and substantial duties of your regular occupation, even if you still might be able to work at another occupation.

To qualify as disabled under an "any occupation" policy, you must be unable to work at any occupation for which you are trained, educated or suited. Own-occupation policies are more expensive, but are usually the better option for most people.

The distinction between partial and total disability in your policy matters, too. Learn more about the difference:

    3. How could my coverage or premiums change?

    Can the insurance company change your coverage or premiums? It depends on the language in the policy.

    Guaranteed renewable

    This feature ensure your insurer cannot change or cancel your policy as long as you keep paying the premiums. However, your rates are not guaranteed to stay the same.

    Non-cancelable coverage

    The non-cancelable feature guarantees your insurance company cannot raise your rates or cancel your policy for the duration of the coverage. The only time your rate would increase is if you changed your benefits - such as increasing your monthly benefit, the length of the benefit period, or adding a rider to the policy.

    Income growth and higher monthly benefits

    Life events may prompt you to reevaluate your coverage. For example, if your income grows, you may want to increase your monthly benefit. Many individual disability policies offer riders that allow this "guaranteed insurability" without additional medical underwriting. However, there may be limitations to the increase, and you may have to undergo financial underwriting.


    Selecting the right disability insurance policy is no simple task, but by asking the right questions and working with a trusted insurance agent, you can find coverage that matches your needs.

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