Tips On Shopping For
Disability Income Insurance 

Some important provisions to look for when comparing Disability Income policies:

• Definition of disability - Are education, experience and past earnings taken into account in determining what the insured can reasonably be expected to do?
  MOST IMPORTANT: Does contract provide an "own occupation" or "any occupation" definition for disability?

• Partial or residual disability - Are benefits provided when medical impairment allows the insured to perform only a portion of his or her duties? Is this benefit payable only when preceded by a period of total disability? The wording in the contract is very important.

• Renewability - Is the policy non-cancelable AND guaranteed renewable by the issuing company?

• Benefit period - A long-term medical disability can be economically devastating. Therefore, one should elect a long-term benefit period where possible. Most companies offer coverage to age 65, some offer lifetime benefit periods.
  CAUTION: Highly compensated employees should look closely at Group Long-Term disability coverage. While many programs offer to continue 60% or 66% of salary, many have a dollar limitation of some sort.

• Waiting or elimination periods - Are they proper for the insured's circumstances? Commonly available periods include 30-day, 60-day, 90-day, 6 months and 1 year. Naturally, the longer the elimination period selected, the lower his or her premiums will be. However, a person's needs, cash reserves and income sources should be the deciding factors in selecting a proper elimination/waiting period.

• Cost-of-living adjustment - Is a COLA available to increase benefit payouts subsequent to disability and protect the insured against inflation?

• Guaranteed future insurability - Can disability income be increased as the insured's salary increases without proving medical insurability?

• Premium waiver after disability - Are premiums automatically waived during periods of disability?