Disability insurance is a product you should own for the obvious reasons, but it is a lot more complicated than life insurance. Three reasons explain why:
- Claims Are More Difficult - When is comes to claims, life insurance is usually pretty easy. After all, if you die...well, people can tell. Defining a disability is a lot more complicated. Competing carriers make a big deal about their respective definitions of disability and it takes a little time and energy to understand the nuances of each carrier's policy language. And those nuances - particularly if you're in the medical profession - matter.
- Benefits - The time period between when you become disabled and when benefits are paid is called the Elimination Period. So what do you choose - 30 days, 60 days, 90 days, 180 days, 1 year, etc. Are the premiums guaranteed? How long are benefits going to be paid? What if you have a heart attack, get better, and then have another one? Do you have to go through the Elimination Period again? What if you can only come back to work part time? Are your benefits still paid? Do your monthly disability benefits increase with inflation? Like I said, this is complicated.
- Taxation - In some situations, you can buy your disability insurance and deduct the premium. Doing so though, makes the disability benefit taxable at claim. Of course, you could buy the policy and not deduct the premium, and your disability benefit wouldn't be taxable. What's the right way to go for you?
When it comes to your disability insurance - at a high level - you can choose to work with someone that represents only one carrier (maybe Principal, or Northwestern Mutual, or Guardian); or you can work with someone who has access to a dozen or more disability carriers. Doesn't it just makes sense to work with someone that has more options to offer you? Contact us.