7 Easy Tips to Buying The Right Disability Insurance Policy

7 Easy Tips to Buying The Right Disability Insurance Policy

Between the dozens of different companies to choose from and complex terminology, the process of buying disability insurance can be intimidating. Luckily there are some tips that you can use to make the process easier so that you can be sure to get the right policy for you.

These seven tips have been compiled in one list to help you with your search and purchase to protect your income in the event that you become disabled:

1. Get the “Own-Occupation” Definition of Disabled

When it comes to disability insurance, the definition of disabled is one of the most important aspects of your coverage. The golden standard of this would be the “own-occupation” definition.

Own-occupation means that you are considered disabled and can receive benefits if you can no longer work in your original occupation. Some disability insurance policies will not provide benefits if you can still work, only at a different job.

That means that if you were a doctor making over $200,000 a year and your disability made you unable to continue practising but you could get a job making minimum wage, you don’t qualify for benefits.

2. Work With the Right Agent

Because the language of disability insurance policies is so complex, most people work with an agent to help them find a good policy that works for them.

These agents should be very knowledgeable in the types of policies and the optional riders that you can purchase. Of course, it’s important that you do a little research on your own to have some basic knowledge of what you want.

But without the backing of a good agent, you can easily end up with a policy that you pay for years, and end up without coverage in the end. 

3. Ask for Discounts

If you’ve already followed tip #2, you should have a good agent that can find discounts that you are eligible for. 

Most insurance companies don’t exactly advertise the discounts that they offer but when questioned, they won’t deny them.

Since many disability insurance policies can cost you up to three per cent of your total income, getting any discounts will help you save money. 

4. Choose the Longest Waiting Period

When purchasing a disability insurance policy, you usually have the ability to choose your own waiting period. You can choose to have your benefits kick in at 30 days, 60 days, 90 days, or even longer.

The shorter your waiting period, the more expensive your policy will be. 

The best course of action is to choose the longest waiting period to keep your premium low and save up an emergency fund to survive off of until your benefits kick in. 

5. Buy When You Are Young

Disability insurance premiums are determined through a complicated risk assessment. One of the biggest aspects that determine your risk of becoming disabled is your age. 

The older you are, the higher risk you carry. You can have an affordable disability insurance policy by purchasing as soon as possible. The earlier the better.

6. Buy the “Future Increase Option”

The amount of insurance you can buy is limited to the amount of money you currently make. Since your best option price-wise is to buy early, chances are that your income will increase as you age.

You can allow yourself the ability to increase your insurance as your income grows if you add the “future increase option” rider into your policy. 

This way you can get a more affordable premium but still get enough benefits to cover your living costs as your income increases. 

7. Don’t Overanalyze

Although you should always do your research and take your time to get more than one quote from several different companies, don’t overanalyze to make it take longer than necessary. 

If you wait too long to choose which policy you want, you risk becoming disabled in the meantime, which will make you less eligible for coverage. 



Overall, the best disability insurance policy will be the one that provides you with enough benefits to continue to have an income while you are unable to work.

Most of the reputable companies have similar policies and offer all the standard riders as add-ons. If you follow these seven tips, you will be protected.

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