Apples to Apples
Have you conducted a needs analysis for disability insurance with your agent or broker? Do you have an idea how much DI you would probably need for you and your family to survive with an extended disability? Were you sufficiently awed by the numbers that you are ready to take the step to protect your income?
Now comes the really hard part – finding the right type of policy to fit your needs, goals and objectives. The best way to determine the right policy for you is to compare several different options. You can approach this comparison method by outlining the factors that are most important to you and/or that will most affect your premium payments. The key is to be certain you are comparing “apples to apples” because one simple variance in a policy can have an impact not only on premium, but on the sort of coverage you receive. Some of the major factors to consider when creating your template are:
• Elimination Period (EP) – This is the period of time between when a claim is filed and when coverage begins. The longer the elimination period, the smaller the premium. If you do not have much savings and would need the income more quickly, you can look for shorter EPs – just be prepared to pay a higher price for your policy if you opt for a shorter EP.
• Benefit Period (BP) – This is the period of time that the policy will pay benefits. If the average disability loss for your age is five years, you might want to consider that as your BP when considering policies. Some policies, though, will pay all the way to age 65 or your entire lifetime as well – these are more expensive, but if there’s a reasonable risk of permanent disability in your occupation, this could be something to consider.
• Monthly Benefit Amount – This amount that would be paid to you monthly, upon a successful claim, is determined by the insurance company according to your income and other factors like any other coverages and the risk of the company paying out due to your occupation.
• Medical Job Classification – What you do for a living plays a role in determining policy rates. You will always be asked for your medical specialty when you request a quote for disability insurance.
If you are concerned about your monthly payments, some of these things can be adjusted to raise or lower the premium to fit within your budget. As a medical or dental professional with high income potential, this coverage is worth the premium, but certainly there is no need to break the bank to get the protection you and your family deserve.