Disability Income Policy Checklist

For professionals interested in obtaining disability income insurance protection, having a reference by which the various policies available may be compared, can be useful. Contrary to common assumption, a disability income policy can vary significantly from one insurance provider to the next. Understanding these differences and the impact they have on the quality of income protection being provided allows for consumers to make more informed and educated decisions when obtaining coverage. Below is a checklist of the top three provisions to review when applying for disability insurance.Own-Occupation Definition of Total Disability
For professionals with specialized occupations, having an own-occupation clause is essential to adequately protecting one’s income. A disability policy with this provision considers an insured to be totally disabled if he/she becomes unable to work in his/her specific occupation, even if working in a different capacity.Non-Cancellable and Guaranteed Renewable
To guarantee the premiums for a disability income policy, professionals need to look for a policy that is Non-Cancellable and Guaranteed Renewable. Only a policy with this provision guarantees that the insurance company cannot increase your premiums or alter the benefits. A disability policy that is Non-Cancellable has greater value and is generally accompanied by more favorable provisions throughout.Residual Disability Benefits (Partial)
An important part of properly protecting one’s income is expanding the circumstances under which benefits can be accessed, if a loss of income is experienced. Including the residual disability benefit expands a disability policy to include and provide benefits for partial disabilities. This provision, perhaps more than any other, can differentiate tremendously from one carrier to the next. As a general rule, the fewer requirements set forth by the insurance company, the more favorable the provision. Therefore, a policy which solely requires a loss of income is considered more favorable than one that requires a loss of income and a loss of time or the ability to perform some duties.Unfortunately, many professionals rely on their employers to provide disability income protection and never consider the option of obtaining an individual policy. The truth is that owning an individual policy is beneficial for numerous reasons and should be considered by any professional who relies on his/her ability to earn an income. Although there are many provisions, benefits and optional riders offered by insurance companies, using this checklist will provide an excellent start to properly protecting one’s income through an individual disability income policy.