|
How much does disability insurance cost?
The cost of disability insurance is dependent upon
a number factors including: occupation, income, health
and the benefits and type of policy selected. For
a custom disability insurance quote, call MEG Financial
at (877) 583-3955 or click
here to answer a few short questions and receive
your personalized quote.
When am I considered disabled?
The “definition of disability” may vary
significantly among insurance companies. The most
comprehensive definition of disability is “own
occupation” which means the insurance company
will pay benefits if you can’t work at your
own specific occupation even if you are working in
another capacity. There are several different definitions
used by insurance companies to determine an individual’s
eligibility for disability benefits. For more information
see the article, "comparing
disability insurance policies".
If I am disabled, when do benefits start?
Before any benefits are paid, a waiting period called
the “elimination period”, must be satisfied.
This is the period of time where an individual is
disabled but benefits are not paid. At the time the
disability policy is purchased, you can select the
appropriate elimination period that best meets your
needs. Elimination periods can be as short as 30
days or up to 365 days depending on the type of policy.
The shorter the elimination period, the more the
policy will cost. The most common elimination period
is 90 days. Benefits can start after one month or
up to two years after you become disabled.
If I am disabled, how long will my benefits last?
At the outset of the policy, you can choose the
appropriate benefit period based on your specific
needs. Benefits may be payable for two years, five
years, to age 65 or to age 67 with some companies.
Avery few companies offer the option of lifetime
benefits. Policies that have longer benefit periods
out to age 65 or 67 are more expensive than those
with only 2 or 5 year benefit periods. The benefit
period selected should match your individual needs.
How much disability benefits can I buy?
Depending on the type of disability insurance policy
and the income of the individual, most companies
will write 55-65% of annual income up to a certain
maximum. This maximum is different with all companies
but the cumulative maximum is $15,000 for traditional
person disability income insurance. There are policies
available above the $15,000 monthly benefit but these
are specialty policies not written by traditional
insurance providers. If your need for individual
disability income insurance exceeds $15,000 a month,
please call MEG Financial at (877) 585-3955 and we
will prepare you a custom quote.
Can my policy be canceled or my premiums increased?
After the definition of disability, the two most
important features of any individual disability policy
are renewability and cancelability. You should only
consider a policy if it is guaranteed renewable and
noncancellable. If your policy includes these features,
the insurance company can never increase your premium
rate or change the terms of your policy as long as
you pay your premiums on time. Any policy offering
a less than guaranteed renewable and noncancellable
features should be considered inferior.
What
are the requirements to obtain a disability insurance
policy?
In order to obtain a disability insurance policy,
you must to complete and sign an application for
insurance, have a routine insurance exam, and provide
financial documentation to prove your income. Additionally,
there may be a brief telephone interview required
depending on the type and size of the policy. For
more information see, "The
process of applying for keyman insurance" and "underwriting
keyman insurance".
What is Key Man Disability Insurance?
Key man disability insurance is purchased on the
life of a key employee or executive to protect the
business if a disabling accident, injury or illness
should occur. It provides peace of mind to companies
and business owners alike knowing that the business
can continue operations without major disruption
if a disability strikes a top salesperson, executive
or key employee. For more information, see what is
key man disability insurance?
What is Disability Buy-Out insurance?
Disability buy-out insurance is designed to provide
the funds needed to purchase a disabled owner or
partner’s interest in the business if they
become disabled. Disability buy-out insurance should
be made part of any business
continuation plan or
business succession
plan as it will assure that the
disabled business owner receives a fair market value
for his or her interest in the business. At the same
time, it will protect all business owners from the
threat that a disability may impose on the company
by allowing them to buy-out the disabled owner’s
interest at an agreed upon price set forth in a buy-sell
agreement.
What is Business Overhead Expense insurance?
In the event that a business owner is disabled,
business overhead expense insurance provides funds
that can be used to recover certain operational expenses
of the company. The income provided by a business
overhead policy can allow the company to continue
operations during the business owner’s disability.
Policies are usually purchased for short term periods
ranging from 12-24 months depending on the needs
of the business. They are designed to “buy
time” while the business owner recovers from
a disability. If the disability is expected to be
long term or permanent, the company can be sold at
fair market value or dissolved. For more information
see, Business
overhead expense insurance.
For any additional disability insurance questions,
please call MEG Financial today at (877) 583-3955.
A disability specialist can help you determine the
policy that best meets your needs and provide a custom
quote.
|
