- Group policies: It is always a good idea to purchase a group insurance policy provided by your employers. If you are getting cheaper insurance outside your employer, make sure you read the fine print properly to be clear about the terms of the policy. If you have a working spouse then compare your spouse’s policy with yours and see who is getting better insurance. Go with the one that is more cost effective.
- Use after tax dollars: Benefits in a policy that uses after tax dollars are not taxable and hence can be worth less.
- Elimination period: If you can then arrange for a shorter waiting period. Remember that you will receive disability benefits only after you are past the waiting period. Maybe you will have to pay more to choose a shorter waiting period, but you can receive benefits soon.
- Waiver of premium: Your insurance company will relinquish the premiums during the time that you are disabled. Most of the disability policies have the option of waiver of premiums and if you are not offered such, then you might as well ask for it.
- Inflation rider: Some insurance companies also offer a rider policy and may help lower the cost with greater benefit. This is especially valuable if you suffer long term disability.
- Non-cancelable section: This means that as long as you continue to pay the premiums your policy will not be cancelled under any situation. Neither the terms of the contract will be altered nor will the premiums be raised.
- Renewable policy: Look for a guaranteed renewable policy. This way your policy will be renewed over an extended period of time as mentioned in the policy term. Another thing is that there cannot be any modification in the contract or any raise in rates for your individual policy. If it has to be then it must be done for the entire class i.e. for the group of people who have opted for the policy.
- Qualifying for benefits: You must conform to the definition of ‘disabled’ as mentioned in the policy.
- State disability insurance: Check out what your state disability insurance has to offer. You may find an interesting policy to suit your need. State programs often offer a lot of saving opportunities to customers opting to buy insurance.
- Future increase option: If you are young and invest in disability insurance, you have more chances of being ensured a higher replacement rate provided your income also increases by the time you are 40 and want to avail disability benefits.
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