1. The type of disability contract: A "non-cancelable" disability contract guarantees that a company cannot cancel a policy or change the rates, as long as you continue to pay the premiums on time. A "guaranteed renewable" disability policy guarantees that the terms of your policy can't be changed, however premiums may be changed after a certain period (generally 2 to 3 years) and only if the change applies to all policies with similar benefits in your risk class. A third type of contract, often called an "optionally renewable" disability policy, is one that can be canceled by the company at renewal time, and may require you to have periodic physical exams. The contract that guarantees the most generally demands a higher premium.
2. The waiting period: You select the amount of time you will wait before you receive your first disability payment. Generally, the longer the waiting period, the lower the premiums. Typical waiting periods are 60, 90, 180, 365, 730 days.
3. The benefit amount: The amount of monthly benefit you apply for directly relates to your premium. Generally, the higher the benefit, the higher the premium.
4. The benefit period: The maximum length of time benefits will be paid. Your choices are typically 2 years, 5 years or to your normal retirement age. Generally, the longer the benefit period, the higher the premium.
5. Your current health status and medical history: If you have a current health issue or previous injury, you may still qualify. An underwriter looks at each individual application and determines the risk factor. Some pre-existing conditions may be accepted with an exclusion amendment added to your policy (i.e.- a previous knee injury).

How is a disability defined?

The definition of the disability will be outlined in your policy and may vary between companies. That definition will determine the circumstances under which you will be able to receive payments, and possibly whether you may be able to go into some other line of work while still drawing on your disability benefits.

Who needs Disability Insurance?

Most people need some kind of coverage, which will replace most of their usual income in case they cannot work due to disability. When people without disability insurance become disabled, income stops or is reduced, and savings are drained. Some exceptions are those with high levels of investment income, students, or individuals whose spouse continues to provide enough income to cover expenses.

If I have a group disability policy, do I need an individual policy as well?

Group insurance plans through an employer can provide needed coverage. An individual needs to know if the plan covers illness and injury, for how much and for what period of time. Some group policies provide coverage only if injured on the job and only for a short period of time. Some employers provide no group coverage at all. Many individuals have multiple policies that cover long term disabilities.

What type of medical exam is required?

A medical exam is required for all disability insurance companies. This process can be completed in your home or any other convenient location. The exam takes about 15-30 minutes and is conducted by a licensed paramedical or medical doctor. An exam generally involves a blood and urine specimen, blood pressure reading, height and weight measurement and sometimes a series of questions regarding your medical history.

When does my insurance coverage begin?

Most companies provide temporary and conditional coverage at the completion of the medical exam provided a premium payment is made when the application is mailed. This coverage is subject to the conditions outlined in the conditional receipt. If you are replacing an existing policy, it is very important to continue coverage until a new policy is approved at a satisfactory premium.

When do I make my first payment?

You may make your first premium payment with the application if you would like conditional coverage during the time your policy is being underwritten. Coverage will begin in most cases after the medical exam is completed. However, The Standard does not require that a premium payment be made at the time of application. Your first premium payment may be made when your policy is delivered. In that case, coverage begins when the policy is accepted and you pay your first premium.

What determines the rating I will receive on my application?

In order to receive preferred rates, you must be in excellent overall health and lead a healthy lifestyle. Each company determines limits on weight to height, cholesterol, blood pressure, and you must not have any significant personal health issues. Family health history is also a factor used in qualifying for low preferred rates. You cannot use tobacco of any type. You must not have a history of alcohol abuse or drug use. You may not be involved in hazardous activities. All of these factors are considered together when determining your insurability.

How much Disability Insurance do I need?

You need enough coverage to provide you with sufficient income to live on until you are able to return to work or receive other financial resources (retirement, social security, etc.). The benefits your purchase through a disability policy is quoted as monthly income that you receive if disabled. Consider your monthly income after taxes as the base amount you would need. If you have other sources of income, that should be considered in the amount you apply for. In addition to the monthly amount, an individual needs to consider the length of time you want to collect benefits, and when you would need them to begin. Pay attention to the premium amount also. Don't buy more coverage than you can reasonably afford.