If you can’t work, how will you pay your bills and plan for retirement? Disability insurance is protection for your paycheck.
Which insurance company do you choose?
There are a variety of factors that determine the quality of a disability insurance company and policy and which one is the best fit for you.
1. AM Best and Better Business Bureau Ratings
The AM Best rating shows the company’s financial strength and the BBB rating shows the company’s customer service strength. If the company has good ratings in both places, it’s off to a good start.
2. Base Policy Details
Policy features and riders offered by each disability insurance company is important. You want to make sure you’re getting a policy that fits you and your situation.
Policy details will include things like the:
- Elimination period – how long you must wait before a company will pay a benefit
- Benefit period – how long the benefit will be paid out
- Policy’s definition of disability – own occupation, modified own occupation, any occupation
- Partial benefits – if you’re still able to work, but at a reduced capacity
3. Built-in policy features
What built-in policy features do they offer?
Some policy features that we highly recommend are:
- Wavier of premium
- Guaranteed renewable
- Automatic increase benefit
- Future purchase option
- Presumptive total disability
- Residual or partial disability benefit
- Family care benefit
- Survivor benefit (death benefit)
- Good health benefit
- Occupational rehabilitation.
Some other good options to consider are:
- Student loan
- Retirement protection
- Critical illness benefit
- Cost-of-living adjustment (COLA)
- Social Security offset riders
Some riders add to the cost of your policy, so be sure to work with an independent, licensed disability agent to make sure you have the features that make sense for you, while at the same time not making your policy unaffordable.
4. Occupation class
Choosing the right company for your occupation is important and can save you a lot of money over the life of the policy. An insurance company may price policyholders of a certain occupation differently than another company, even for white-collar jobs. Most disability insurance companies will heavily consider your occupation and may be more accommodating to people in certain fields. Take this into account when deciding which insurer is right for you.
The Bottom Line
There are a variety of factors that determine what makes a disability insurance company great and which one is the best fit for you. Work with an independent disability insurance agent to help you.