Factors That Impact the Cost of Disability Income Insurance

Disability income insurance protects your ability to earn a living in the event of an injury or illness. Since this insurance protects your livelihood, it’s important to ensure you have a policy that is customized to your specific needs. 

Here are six factors that often impact the cost of disability income insurance for dentists: 

1. Your Income

Your total income can affect the price of your disability income insurance for a number of reasons, including the amount of coverage you want. Premiums for disability income insurance vary based on the amount of coverage and the policy’s configuration. The higher your income, the more you’ll want to be covered for in case of an unforeseen injury or illness. 

It’s also crucial to ensure you have the ability to scale your disability income insurance coverage throughout your career. The income replacement you need today will likely be higher as your career grows. 

2. Waiting Period

A waiting period or elimination period, similiar to a deductible, is the period of time that you must be disabled before any benefits are payable. For many personal disability income insurance policies, this waiting period is 90 days. 

While a 90 day waiting period is most common, many companies offer both longer and shorter waiting periods. Of course, the shorter the waiting period, the higher the cost.

3. Benefit Duration 

The benefit duration or benefit period is the maximum amount of time that you can collect benefits from a policy in the event you are disabled and unable to continue working; the benefit period impacts your ongoing premium.

Benefit periods may be for a fixed amount of time, but it’s more common for them to end at a certain age of the policyholder. Three of the most common ages for benefit period length are 65, 67, and 70 years old. 

4. Riders

Riders are additions to insurance contracts that expand coverage and allow you to customize your disability income insurance policy and ensure your individual needs are met in the event of an illness or injury. 

Here are six of the most common riders: 

• "Own Occupation" is a definition of total disability covering disabilities that prevent you from working in the specific occupation for which you have been trained for and are currently working in. If you are totally disabled and unable to work in your own occupation, full benefits are payable even if you return to work in a new occupation.

• A cost of living rider may provide a post-disability adjustment to your monthly benefit to help offset the impact of inflation. As inflation may decrease the purchasing power of your income, you may want your disability income benefit to increase to try to counter the effects of inflation. 
• A partial disability rider helps you stay financially secure in the event that you can still work, but not at the same level you could prior to a disabling event. For example, if you see a dip in your income due to not being able to work as much or as quickly as you did before, a partial disability rider could help replace some of your lost income. 
• Catastrophic disability riders are created to benefit you with extra income in a situation where you would require assistance, such as an in-home caregiver. Catastrophic disability benefits are paid in addition to regular monthly disability benefit payments.
• A future insurability option rider allows you to increase the coverage provided by your policy as your income increases regardless of any changes in your health. This rider facilitates increasing your coverage level as your income increases.
• Student loan riders may pay additional monthly benefit payments in the event of total disability. Payments are in addition to your regular monthly disability benefits and paid directly to your lender.

Riders and a number of other options for customizing your disability income insurance policy influence the cost of your premiums based on the additional coverage  it provides. Be sure to speak with a professional who can help you find and make the most appropriate choices for you.

5. Age

Disability insurance premiums are based on age. Purchasing the coverage at a younger age oftentimes results in lower overall premiums. In addition, many companies offer significant discounts when coverage is purchased as a dental student or resident. Recognizing that a dental student or resident may have little or no income, many companies offer special limits for which a student or resident may purchase without proof of income.

6. Health Status

Finally, your current health status factors into your disability income insurance premiums, since insurance companies view you as a lower risk if you’re in good health. 

Individuals tend to become less healthy as they age. Purchasing disability income insurance while younger helps hedge against a change in health impacting one's ability to purchase disability insurance. Further, future changes in health may be mitigated by purchasing a policy that includes a rider that allows coverage to be increased as income increases without having to show continued good health.

How Do You Find The Right Disability Income Insurance Policy? 

To better understand details pertaining to your individual policy, how your premium is determined, which riders are right for you, and more, speak with insurance professionals who specialize in disability income insurance policies specific to dentists. You will also have the opportunity to learn about: 

• Non-cancelable and guaranteed renewable policies, which means the terms of your policy can’t be changed or canceled.
• Level premiums, which provide consistent pricing from the time your policy begins until age 65. 
• Graded premiums, which allow you to begin with a lower premium cost that increases annually. 

Request a free consultation with Treloar & Heisel to learn more about disability income insurance and how to find the right policy for you today! 

About Treloar & Heisel 

Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.