Considerations When Purchasing a Disability Income Insurance Policy

Disability income insurance is coverage that’s designed to replace a portion of your income if you are unable to work because of an illness or injury. However, having a policy isn’t always enough — it’s important to have coverage that works for your specific scenario. 

When you’re considering purchasing a policy, you can ask the following questions to make sure you obtain the disability income policy that’s right for you. 

4 Questions To Ask When Considering a Disability Income Insurance Policy

1. Can I continue receiving benefits if I return to work in a new occupation?

If your policy includes an “own occupation” definition of total disability, full benefits may be payable even if you return to work in a new occupation. For example, a dentist engaged in full time clinical private practice becomes totally disabled and subsequently returns to work in a faculty position.

Discuss the specifics of your coverage with your provider as the conditions and requirements may vary by policy. 

2. Should I purchase an individual disability income policy or an employer-sponsored group policy? 

Some dental practices may offer group long-term disability income coverage as a benefit. Here are some common factors of this policy type to consider: 

• These policies may be offered to employees at low to no cost.
• You may not be required to complete health underwriting before receiving coverage, but the provider may limit coverage for certain pre-existing conditions.
• Oftentimes, group policies are contractually weaker and less flexible. 
• Since your employer is in control of the policy, it may or may not be renewed by your employer or the insurance company and it lacks portability in the event of a job change. 

Participation in an employer provided group long term disability plan may be voluntary or involuntary. In any event, an individual disability income insurance policy should be considered for the reasons discussed above. Other items to consider include:

• Individual policies usually require full underwriting, including requirements such as medical examinations and financial stipulations. 
• Premiums and contractual provisions are often guaranteed for a specified period, typically until age 65 as long as premiums continue to be paid.
• Disability policies that provide these guarantees are referred to as being non-cancellable and guaranteed renewable
• Oftentimes, individual policies have stronger contractual provisions and are more flexible than group policies. 
• Individual policies are also not tied to your employment, so they are portable in the event of a job change. 

3. When, and for how long, are my benefits payable?

Individual disability income insurance policies often include an elimination period. Similar to a deductible on other types of insurance, this is the period of time for which you must be disabled before any benefits are payable. Depending on the insurance company, elimination period options may be as short as 30 days or as long as 365 days with a 90 day elimination period being the most common. Of course, the shorter the elimination period, the higher the cost.

Your policy benefits may often be payable, while disabled, until you reach a certain age. Benefit periods of age 65, 67, and 70 are common. 

4. How can I customize my disability income insurance policy? 

Your disability income insurance policy will likely have a number of options, called riders, to help customize a policy to meet your individual needs.  Depending on the insurance company, these riders may include:

• Own occupation rider.
• Partial/residual disability rider.
• Cost-of-living adjustments.
• Future insurability options.
• Catastrophic disability rider.
• Student loan rider.
• Graded premiums. 
• Level premiums.

It’s important to work with insurance specialist who specializes in disability income insurance for dentists to help you with your policy decisions.

Find the Right Disability Income Insurance Policy for You

Your ability to earn an income is your greatest asset, which makes disability income insurance so crucial. In order to protect your livelihood in the case of a life-changing situation, you need coverage that’s tailored to you. 

You’ll likely have a number of questions about this policy before you select a plan, so we’ve broken down the most common considerations, including: 

• Benefits of disability income insurance.
• Individual policies.
• How your premium is determined.
• Riders.
• How to get the right disability income insurance for your career. 

Since health and age are both factors that are considered when obtaining disability income insurance, the time to think about protection is now. Download our free guide, Disability Income Insurance for Dentists, to help you find effective coverage for your dental career.