Frequently Asked Questions
CONSIDER THESE QUESTIONS WHEN EVALUATING DISABILITY INSURANCE POLICIES
What is an "own-occupation" disability insurance policy?
It is important to consider the value in obtaining "own-occupation" disability insurance coverage that protects your ability to work in your occupation or specialty. Most own occupation disability insurance policies define a disability as the inability to work in your regular occupation due to an injury or illness.
What is the underwriting process for obtaining disability insurance?
After you select a plan, an application will be emailed to you for completion. A complementary medical exam appointment will be scheduled with a local nurse practitioner to be completed at your home or office. Once the insurance company has reviewed your signed application and medical exam results, you will be notified with the insurance company's decision to offer coverage. If approved, the policy will be mailed to your home address.
How much does disability insurance cost?
Most individuals can expect to spend between 1-4% of their annual income for a disability insurance policy. The cost of the policy is based on a few factors such as age, health, home state, medical specialty, gender, monthly benefit, optional benefit riders, etc.
Will the insurance company cancel my policy or raise my rates?
Be sure to select a guaranteed renewable and non-cancelable disability insurance policy. This means that as long as the the policy remains in-force, the insurance company cannot cancel the coverage or increase the premiums for any reason. Even if your health changes or you move to a different state, the insurance policy will remain exactly the same as long as you pay your premiums.
Are disability insurance benefits taxable income?
If you pay the premium with after-tax income (net income), the monthly benefit will not be taxed. If you choose to deduct your premiums, the monthly benefit will be taxed during a period of disability. Also, if your employer pays the premium for you, the monthly benefit will be taxed.
What is an exclusion of coverage?
Pre-existing conditions can be excluded from the policy if you have received medical treatment prior to applying for disability insurance. Exclusions can be issued on either a temporary or permanent basis. In some instances, exclusions can be removed from the policy at the policy anniversary date. Be sure to speak with your agent if you have received medical treatment for a pre-existing condition.
Do insurance companies cover pregnancy or maternity leave?
Disability insurance companies cover disabilities from complications due to pregnancy. However, missed time from work due to normal childbirth or maternity leave is not considered to be a disability.
What are the differences between Individual and Group disability insurance policies?
There are substantial differences between group and individual disability insurance contracts.
Group Insurance
1. Policy can be canceled or changed at any time.
2. Policy is generally not portable if you decide to leave employer.
3. Restricted definitions of disability - own occupation definition generally not included.
4. Taxable benefits.
Individual Insurance
1. Policy cannot be canceled or changed as long as premiums are paid.
2. Policy is portable no matter where you are in the country.
3. Own Occupation disability benefits available to age 65 or 67.
4. Non-taxable benefits as long as policy premiums are paid with after-tax dollars.
What happens if I decide to work outside of the country?
Most insurance companies will exclude foreign travel or working outside of the country. Other companies will suspend the policy for a period of time or until you return to the states. Discuss your situation with an agent to determine your eligibility for future benefits if deciding to leave the country.
Do I have to pay additional fees by using a broker to obtain disability insurance?
There are no additional costs in purchasing disability insurance through a broker. The cost of the policy is exactly the same as if you went through the insurance company directly. A broker can help you understand which company may suit you best as well as help you determine the value of optional benefit riders available on the policies.
