Today I spoke to a young a CRNA who was shopping for disability insurance. He is a 31 year old married man who is in the early stages of his career. He plans to work until age 65. He was looking at both the individual policies and the association policy. His income is $200k/year and he wanted to purchase $8000/month. He is healthy and not on any medications.
The association policy premium was approximately $1500/year whereas the individual policy was close to $2600/year. At first glance, the association policy looked like a better deal. I told him that the association policy rates climb with age and long term the rates for the individual policy would cost less over the course of his career.
The person at the association office told him that even though the association rates increase with age, it still costs less than an individual policy. I told him to call the association back and obtain the rates and we could calculate the difference.
The individual policy costs $2880/year. Over 30 years (assuming he never increases his coverage), the premium would be a total of $86,400.
The association policy would cost $1500/year in his 30s (or more), $2600/year in his 40s and $6000/year in his 50s. The total cost would be $101,000. This is a significant difference.
Besides the cost, there are several other differences between an individual and association policy. The association policy may have more restrictive definitions of disability than an individual and the policy language is subject to change.
An individual policy with a noncancelable, guaranteed renewable clause will guarantee that the policy language will never change nor will the premium.
For more information about disability insurance for CRNAs or to request a quote, contact Set for Life Insurance today!