Disability insurance in Seattle, WA provides financial support if you are unable to work due to a disability. It typically pays out benefits that amount to 50-60% of your current income, which is incredibly helpful, especially if you are a major financial contributor in your household. However, you need to pick the right plan to maximize its benefits. Take note of these considerations before deciding on disability insurance.
What to Consider Before Buying Disability Insurance
Disability insurance is designed to cover your expenses while you can’t work due to a disability, making a difficult part of your life less stressful. With financial aid, you can focus more on recovering and enjoy tax-free benefits. It can also help you cover your healthcare costs, such as expensive medications, checkups, rehabilitation, and home care.
Disability insurance is a significant investment, so consider your options carefully. Consider the following before signing any policies:
- Definition of Disability
Establish the definition of disability in your potential policies. Disability insurances typically define “disability” in two ways: own-occupation and any occupation.
An own-occupation insurance policy covers people who became disabled and are now unable to do most of their occupational responsibilities. An electrician who cannot perform his normal job can work as a shop clerk and still be eligible for disability benefits under the own occupation policy.
An any occupation insurance policy covers individuals who are unable to work in any occupation due to a disability. It is typically less expensive than an own-occupation insurance policy, but its benefits are often harder to claim.
- Protection Features
Check your disability insurance in Seattle, WA, for protection features. Determine whether it has noncancelable or guaranteed renewal protection.
A noncancelable feature means that the insurance company cannot cancel the policy unless you failed to pay the premium. This gives you the right to renew your insurance policy every year without an increase in the premium or a benefits reduction.
A guaranteed renewal, meanwhile, gives you the right against policy cancellation and policy. However, it gives your insurer the right to increase your premium if it applies to all policies insuring the same risk class. An insurance policy with guaranteed renewal protection is often cheaper than one with a noncancelable feature.
- Length of Elimination Period
Similar to the contestability period of life insurance in Seattle, WA, disability insurance is subject to an elimination period. Also known as the waiting period, this is the length of time you need to wait to start receiving your disability benefits after you become disabled. The elimination period ranges from 30 days to 720 days. The shorter the elimination period, the more expensive a disability insurance.
- Benefit Period
The benefit period is the duration of time that you will receive your disability benefits. The amount of premium you pay will depend on the benefit period. The shorter the benefit period, the lower the premium you will have to pay.
Be Smart with Your Disability Insurance Investment
Having disability insurance is like having Seattle, WA dental insurance, in the sense that you wish you will never need to use it. However, it proves to be a worthwhile investment when you do have to use it. Talk to an insurance expert in your area to explore your options and find the best policy for your unique needs, budget, and preferences.