Disability Insurance: Age Matters
The best time to purchase an individual disability insurance policy is when you are young and healthy and the premiums are still affordable.
If you are in your 20s and have a firm grip on where you are going with your career, this is an ideal time to purchase your individual disability policy. We work with a lot of computer consultants, software engineers, attorneys, accountants and entrepreneurs. Typically people in their 20s are still healthy and qualifying for disability insurance medically is usually not an obstacle. Make sure you purchase the ability to increase your policy in the future without further medical underwriting to protect your insurability.
This seems to be the most popular time to purchase an individual disability insurance. For medical residents and fellows, this is typically the age when you are finishing your training and when your medical school loans come due. Medical underwriting can sometimes be an obstacle but the premiums are still manageable in your 30s. The 30s also seem to be the time when people settle down, get married, buy their first home and start a family. Life insurance becomes more important at this stage as well.
People usually approach us in their 40s to purchase an individual policy because they are going through a life change or their existing insurance is getting stale or too expensive. We see a lot of consultants who once worked for a large company going on their own and choose to set up their own insurance. Or, we see a lot of business owners who are now partners who wish to set up buy sell agreements on their partners. If you are in your 40s and are starting a new income, companies like to see at least 2 years of established income. Underwriting can sometimes be an obstacle in your 40s if you have had some health issues.
We are approached regularly by people in their 50s who are looking to insure their incomes in the vulnerable years when their children are in college and not yet out of the house. Additionally, we see a lot of corporate executives, CEOs and consultants looking to insure their income at their peak. Underwriting can sometimes be an issue and policies can be expensive. Often, people in their 50s opt for a 5 year benefit to cover themselves and help to reduce the cost.
We have quite a few people in their 60s looking for individual disability insurance. This may be a better time to change the risk to more of a long term care policy. Most companies will not issue new policies past age 60 or 65. Long term care premiums are still reasonable in your 60s and you can carry the policy for a longer period of time. Although they are covering different risks, long term care insurance will cover you if something catastrophic happens and you are unable to perform at least 2 activities of daily living.
The best time to purchase an individual disability policy, despite the age, is before you need it or before you have an adverse change in health. Once you have a claim or a bad diagnosis, it is too late.
For more information about individual disability insurance or to request a personalized quote comparison, contact Set for Life Insurance today!