When designing a disability insurance policy that is right for your individual situation there are many factors you should consider. The importance of understanding all of your options is critical for making the best choices – especially when comparing the overall benefits and value versus the cost, and how you desire to have the policy perform.
When working with Disability Insurance Experts to customize a policy there are few key things to consider:
What Monthly Benefit Do I Need?
The following general factors can assist you in determining the amount of coverage you require and how much you may be eligible to receive:
- Current expenses (including savings)
- Current income
- Estimated future earnings
- Existing disability insurance you might have, including a group long term disability insurance (LTD) plan
What are the Factors that can Influence Your Costs?
OCCUPATION. Your occupation will determine your “occupation class.” Certain occupations are considered to present a greater risk of becoming disabled due to the nature of the work; individuals in these occupation classes will be required to pay slightly more for disability insurance coverage.
HEALTH. Your medical history current health will establish a “risk class.” Generally, disability insurance carriers offer three different health or risk classes. The better health you are in, the less you will have to pay for disability insurance coverage.
AGE. In most cases, the younger you are, the less you will have to pay for insurance coverage.
INCOME. Typically, your income determines the maximum monthly benefit you will be eligible to purchase, the higher your monthly benefit the greater the premium will be for the coverage.
POLICY DESIGN. The optional riders, along with the policy elimination period, benefit period, and benefit amount will influence the cost of coverage.
Premium Options Designed to Fit Your Budget
Although most people choose to make level, annual premium payments for their disability insurance coverage through the policy’s expiration date other rate options exist. For instance, some policies offer a featured referred to as graded premiums. Graded premiums increase annually and are usually convertible to a level pay policy on the policy anniversary up to a certain age. It is important to discuss your rate options when you have chosen a policy that suits your needs.
