What dentists should know about disability insurance: Part 4—FAQs
Frequently asked questions (FAQs) about disability insurance
READ PART I
READ PART 2
READ PART 3
Q: What are the chances of becoming disabled?
A: The odds are one in four that a 35-year-old man (higher for women) will miss work more than 90 consecutive days due to an injury or illness. Many disabilities will last as long as five years, and others will last a lifetime.
Q: What happens to my premiums if I never collect from the policy?
A: The carrier has earned the premium for the risk; however, there are policies that provide a benefit that refunds all premiums (less claims paid).
Q: Why should I apply for coverage now?
- You may not be insurable later when you need/want the coverage.
- Premiums (costs) increase as you get older. Note: once a policy is issued, costs remain level to age 65.
- Disability (injury or sickness) can strike anytime and without warning.
Q: How much coverage (monthly benefit) do I really need?
A: Normally coverage should be provided for those overhead items such as rent, food, other insurance, and the like. Lifestyle and other sources of income are factors. Don't count on social security or plans offered by your employer.
Q: What options should I consider?
A: Depending on your occupation and whether you're self employed or not, there are COLA, Residual, Future Increase Option, and others. (Refer to Ideal Policy Article for an explanation of these options.)
Q: What happens if I can't do the duties of my occupation but I can work elsewhere?
A: Policies that provide an own-occupation definition for the definition of total disability will pay regardless. There are other definitions and these vary by carrier and occupation.
Q: What elimination period/benefit period should I consider?
A: The elimination period (like any other deductible) affects cost. Choose one whereby you can be self-insured for the longest period of time. The benefit period should normally be the longest available.
Q: Can premiums be increased?
A: No, if you have a "non-can" policy. Those that aren't non-can are less expensive.
Q: Can a carrier refuse to renew my coverage?
A: No, not if you have a guaranteed renewable policy.
Q: I already have group, long-term disability (LTD) coverage at work. Do I need more?
A: Probably, since many group plans are taxable (employer paid). Also, because of caps, highly compensated executives face reverse discrimination and will be underinsured!
Q: How much will coverage cost?
A: For women, normally 2% to 4% of income, and for males 2% to 3% of income. These percentages are approximate and could be much lower depending on options and benefit period. Coverage can also be based on a specified amount that you want to spend.
Q: Are there limits as to how much coverage I can have?
A: Normally 50% to 60% of your salary can be covered. The higher the income after $100,000 the lower the percentage. Self-employed people must use net income as the baseline.
Q: How do I apply and what do I have to provide?
A: Contact your agent or a company that exclusively specializes in disability insurance. Normally an exam will have to be provided as well as financial documentation.
Q: Why should I use DIRC (Disability Insurance Resource Center)?
A: Our over 25 years experience and the fact that we specialize demonstrate that we can satisfy all of your concerns regardless of your circumstances.
Q: What if I've already been turned down?
A: DIRC has carriers that provide coverage for those who may believe they are uninsurable.
For more detailed explanations and answers to these questions, visit How to Select the Ideal Disability Insurance Policy or request a quote for a prompt, no obligation response.
