Disability Insurance: When to Purchase More Benefit
Jan 31, 2016
Jamie Fleischner

Jamie Fleischner

31 Jan, 2016

When to purchase more disability insurance benefit.

If you have already purchased an individual disability insurance policy, chances are you have the ability to increase the benefits in the future. However, when is the best time to purchase more disability insurance?

Some policies allow or require you to check in very 3rd policy anniversary to determine if you are eligible to purchase additional disability insurance benefit. If you are, they will make an offer. You must take at least 50% of their offer or you won’t have the ability to purchase more benefit in the future without medical underwriting. The downside of this is that you may not be ready to buy more benefit. The upside is, you may need to increase benefits if you have experienced an increase in income.

Some policies allow you to purchase additional disability insurance benefit on every policy anniversary. Some of these policies allow you to increase as much as your income allows whereas other policies only allow you to increase in $1000/month increments.

There are several considerations when it comes to increasing your benefit. The most important consideration being your needs. When you purchased your individual disability policy, you based it on your monthly benefit need at that time. If your needs and/or income has changed, chances are you need to increase or change your benefits accordingly. If you are able to increase the benefits at the opportunity where you do not need to undergo medical underwriting, even better. If your income has increased, chances are your expenses have increased too. As such, you ought to increase your coverage accordingly.

The other consideration is if you have had a life change that would change your need for disability insurance. This includes a significant change in income of more than 20%, the birth or adoption of a child, a new marriage, divorce, job change, move or a change in health. All of these instances can have an impact on your need for disability insurance.

The best advice is to contact your broker where you initially purchased your individual disability insurance to see if increasing or changing your coverage is prudent.

For more information about when you ought to purchase more disability insurance benefit or to request a quote, contact Set for Life Insurance today!

 

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