Over the last 20 years I have specialized in helping people purchase disability insurance and have come across several circumstances where people purchased an unsuitable product or purchased something with questionable circumstances. Here are some red flags to look for when it comes to purchasing disability insurance:
1) You are told that if you buy your disability insurance with your auto or homeowner’s agent you will get a great deal. I’ve worked with several physicians, sugeons and other high income professionals who were presented illustrations from their auto insurance agent that were completely unsuitable. The products didn’t even cover them in their medical specialty. Disability insurance is a specialty product and should be purchased with a broker who is well versed and has the appropriate products for your situation.
2) You feel pressured to make a decision right away. Purchasing a disability insurance product is an important decision that can have a lasting impact on your career and future. Never feel rushed into making a decision.
3) You are told that a product is better since you don’t have to undergo medical underwriting. Some employers or medical residency programs offer individual disability insurance products that do not require medical underwriting. While this can be beneficial to people with medical problems, it may not be in the best interest in those who are healthy enough to apply elsewhere. Oftentimes these situations create an adverse risk selection where the unhealthy sign up for the program which increases the risk pool. As a result, the product offered may have limitations or reserve the right to increase the premium in the future.
4) You are a member of an association and are pressured to purchase their disability plan. Most association policies are inferior to individual disability policies. Most of them have escalating premiums. For example, we work with a great deal of CRNAs who purchased an association disability policy and are blown away when they reach a certain age and their premiums are significantly higher. Unfortunately, a lot of them developed health conditions over the years and may not be able to purchase a policy from another company.
5) You are being told that there is one company that is far superior to others. While the contracts vary slightly from company to company, there are not significant differences. Unless you are a woman receiving a unisex policy that reduces the premium substantially, it makes sense to look at all of your available options. If you are working with an agent of one company that is pushing you to look at that product and that product only, beware.
6) You are told that the medical definition of disability is superior. If you are a physician and are told that the medical definition of disability is superior, you must read this! http://www.diattorney.com/wp-content/uploads/2012/09/03-beware-the-medical-occupation-definition-of-total-disability.pdf
For more information about individual disability insurance or to request a quote, contact Set for Life Insurance today!