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Q: What
are the chances of becoming disabled?
- A:
The odds are one in four that a 35 year old man (higher for women)
will miss work more than 90 consecutive days due to an injury/sickness.
Many disabilities will last 5 years, others lifetime.
Q: What
happens to my premiums if I never collect from the policy?
- A:
The carrier has earned the premium for the risk; however, there
are policies that provide a benefit that refunds all premium
(less claims paid).
Q: Why
should I apply for coverage now?
- A:
You may not be insurable later when you need/want the coverage.
- A:
Premiums (Costs) increase as you get older. Note: once a policy
is issued, costs remain level to 65.
- A:
Disability (injury or sickness) can strike anytime and without
warning.
Q: How
much coverage (Monthly Benefit) do I really need?
- A:
Normally coverage should be provided for those overhead items
such as rent, food, other insurance and the like. Lifestyle and
other sources of income are factors. Don't count on social security
or plans offered by your employer.
Q: What
options should I consider?
- A:
Depending on your occupation and whether you are self employed
or not there are: COLA, Residual, Future Increase Option, and
others. (Refer to Ideal
Policy Article for an explanation of these options)
Q: What
happens if I can't do the duties of my occupation but can work elsewhere?
- A:
Policies that provide an own-occupation definition for the definition
of total disability will pay regardless. There are other definitions
and these vary by carrier and occupation.
Q: What
elimination period, benefit period should I consider?
- A:
The elimination period (like any other deductible) affects cost.
Take one whereby you can be self-insured for the longest period
of time. The benefit period should normally be the longest available.
Q: Can
premiums be increased?
- A:
No (if you have a "non-can" policy). Those that aren't
non-can are less expensive.
Q: Can
a carrier refuse to renew my coverage?
- A:
No (not if you have a guaranteed renewable policy).
Q: I
already have group, long-term disability (LTD) coverage at work.
Do I need more?
- A:
Probably, since many group plans are taxable (employer paid) and
because of caps, highly compensated executives face reverse discrimination
and will be under-insured!
Q: How
much will coverage cost?
- A: For
women, normally, 2-4% of income and for males 2-3% of income.
These percentages are approximate and could be much lower depending
on options and benefit period. Coverage can also be based on a
specified amount that you want to spend.
Q: Are
there limits as to how much coverage I can have?
- A:
Normally 50-60% of your salary can be covered. The higher the
income after $100k the lower the percentage. Self-employed people
must use net income as the base line.
Q: How
do I apply and what do I have to provide or do?
- A:
Contact your agent or a company that exclusively specializes in
disability insurance. Normally an exam will have to be provided
as well as financial documentation.
Q: Why
should I use DIRC (Disability Insurance Resource Center)?
- A: With
our over 25 years experience and the fact that we specialize demonstrates
that we can satisfy all of your concerns regardless of your circumstances.
Q: What
if I've already been turned down?
- A:
DIRC have carriers that provide coverage for those who may believe
they are uninsurable.
For a more detailed
explanation (answers) to your questions, visit How
to Select the Ideal Disability Insurance Policy or request
a quote for a prompt, no obligation response.
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Copyright March
2001, May not be Reproduced in any Form Except by Permission from
DIRC.
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