| All of us should have a financial to-do list. Purchasing | | | | worst type of policy is the conditionally renewable |
| disability insurance probably ranks pretty low on this | | | | policy. The insurance company can raise rates at any |
| list. Most of us figure that we won't need it. But | | | | time or put any condition on the policy.Pay attention |
| according to current statistics, approximately 30% of | | | | to how the insurance company defines "total |
| people age 35 to 65 will have a disability lasting at | | | | disability". The most lenient, consumer-friendly |
| least 90 days. These disabilities can seem as minor as | | | | approach is "own-occupation disability". This means |
| a broken bone, an atypical pregnancy, or an | | | | that if you are disabled and cannot perform your |
| emotional conditional, but all of these can cause you | | | | principal job duties, you will be paid your disability |
| to stay away from your job. If you should ever | | | | benefit, even if you can perform other tasks.The |
| need disability insurance, you will be glad that you | | | | most stringent definition of "total disability" is "any |
| took this precaution. A great number of people | | | | occupation disability". This means that you will not be |
| without coverage could be driven deeply into | | | | paid any benefits unless you are unable to do any |
| debt.Most people think they do not have to purchase | | | | kind of work and are completely unemployed. You |
| additional disability coverage because they are already | | | | will find that many insurance companies define |
| covered through work. But most disability insurance | | | | "disability" somewhere in between the two extremes |
| covered through employers only provides 60% of | | | | defined above.It is prudent to purchase partial |
| your salary. Further, these policies usually set a | | | | disability or residual coverage. This means that the |
| monthly maximum of $10,000, which is less than 60% | | | | insurance company will pay partial disability benefits if |
| of highly compensated employee's salary. Another | | | | you can work at your job only part time. Their |
| problem is that these benefits are fully taxable. This | | | | employer would pay for the time actually worked |
| means your net payment is a lot less than the 60% | | | | and the partial disability coverage would pay the |
| of your salary. These employees find themselves | | | | other portion.The price of disability insurance |
| trying to survive on 40% of their salary.When | | | | premiums typically cost 3% of your annual income. |
| shopping for a policy, look for the strength of the | | | | This varies based on factors such as age, gender, |
| company. You need to determine whether the | | | | occupation and health history. When pricing your |
| insurance company is financially sound. Also make | | | | policy, the insurance company will categorize you |
| sure they will be able to pay their claims in the | | | | according to your occupation class. Your policy will be |
| future.On your contract, check the renewability. | | | | more expensive if your occupation is more likely to |
| There are three options. The non-cancelable contract | | | | results in a disability.As you can see, it is financially |
| is the best. This type of contract locks in your rates | | | | prudent to purchase disability insurance if you would |
| and benefits. The only person that can make | | | | lose your income because of a disability. Only the |
| changes is you, not the insurance company. Next in | | | | wealthiest people are not in this category. There are |
| line is the guaranteed renewable policy. Once you | | | | many factors involved when purchasing this type of |
| have purchased your policy, the insurance company | | | | insurance. Take your time and educate yourself. |
| cannot drop you but they can raise the prices. The | | | | Chances are, you will be glad that you did. |