Disability Insurance Plan Options Tips

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How Does a Return of Premium Provision Work and What Might It Cost?

The Pros and Cons of a Return of Premium Provision in a Disability Insurance Policy

Return of premium disability insurance coverage may or may not be an option you wish to purchase. While its name implies it is a wonderful option, you may deem the cost to be prohibitive. Here is how this feature works.

If you have opted for this option, you pay your premiums as required by all disability insurance companies. Depending on the specific language of your policy, if, after a specified time period (often at least 10 years) you have not filed a claim for disability benefits, your top rated disability company will return a portion or all of the premiums you have paid over this period. This option could prove to be a wonderful and welcome additional benefit for you.

However, you should analyze the cost of adding this option to your current disability insurance plan. This feature can increase your premiums by as much as 50%. Since the best long-term disability insurance for professionals is not inexpensive, a large increase may or may not be in your personal budget. Since many individual disability insurance premiums are tax deductible, this added expense may be less than it at first appears.

Return of premium disability insurance provisions can be a very profitable benefit option or an extra cost may not provide the intended purpose. Other issues involve the amount of return, a portion or the whole amount, what happens to the previous tax deductibility of your premiums, and additional deductibility potential problems if you have a Subchapter S corporation. Discuss this option with your accountant and/or attorney.

The above-listed tip is for informational use only. Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

   
What is a “Social Security” Rider That Can Sometimes Be Added to a Disability Insurance Policy?

How a “Social Security” Rider Added to a Disability Insurance Policy Could Help You

You probably know that when you are disabled you are likely eligible for Social Security Administration benefits. However, depending on the terms of your group or individual disability insurance plan, you may or may not qualify for Social Security Disability Income (SSDI) coverage. They have their own definitions of disability which sometimes differ from the definition in your policy. Therefore, depending on your circumstances, you may qualify for a covered disability under the terms of your own policy, but you may be ineligible for SSDI.

This option normally allows you to increase your disability benefits by up to around $1,000 per month added to your stated level in your plan. Essentially, if you are eligible for benefits from your professional disability insurance coverage but are ineligible for benefits from SSDI, this option would provide you with an increased monthly benefit while you remain disabled.

In your search for the best disability insurance company for you, examine the Social Security option and weigh the cost versus benefit of adding this feature.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

   
How Does the Elimination Period Clause Work and Can I Make It Better For Me?

How Disability Insurance Elimination Period Clauses Work

Almost all standard disability insurance plans include what is termed an “elimination period.” This time frame in which benefits are not paid runs from the date of your covered disability to some period in the future. Generally, the most common elimination period for the best long term disability insurance policies is 90 days. As you search for the best disability insurance company for you, other elimination period choices of 30, 60, 180, and 365 days may be offered.

As noted, you'll often have the choice of shortening the elimination period. However, you will notice a rather dramatic increase in the cost of disability insurance plans as you shorten the elimination period. For illustration purposes, you could equate this period with the deductible amount you've selected for your auto insurance. As your deductible goes down (e.g., from $1,000 to $500), your auto insurance premium can substantially increase.

The length of your elimination period operates in much the same way. Most professional disability insurance policyholders statistically opt for the 90-day choice because it appears to offer the best value for premium cost. Use ProtectYourIncome.com to help you understand your options and get the best disability insurance available.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

   
Can I Get a Disability Plan Option That Guarantees My Future Insurability?

How to Find Disability Plan Options That Guarantee Future Insurability

The best long-term disability insurance programs often offer the ability to guarantee your future insurability. This feature, often called the Future Increase Option (FIO), may become critically important to you in the future. This provision helps protect your insurability and, to a large degree, your future earnings or loss thereof.

In reality, without this or a similar automatic increase rider, your future earnings are not protected at all. Your professional disability insurance will only protect you for your earnings level at the time you purchase the coverage. This provision normally guarantees your insurability for a specified period of time (up to age 55, 60, etc.) and allows you to increase your monthly benefit amount regardless of health issues you might face.

When you want to increase your monthly income benefit -- one of the provisions in disability income insurance -- you normally only need to provide your insurer with your prior year tax return to show your increased regular income. Top rated disability insurance companies usually try their best to allow changes in terms or coverage to be as easy as possible on the insured. This is a good example of top disability insurance programs being user friendly. A future increase option could also be one of the most important disability plan options you consider.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

   
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