| People often make the mistake of shopping for an | | | | education, training, or experience. This means the |
| individual disability insurance policy the same way they | | | | insurance company could say that while you can not |
| would for a term life, or car insurance policy. The | | | | work in your current occupation they believe you could |
| concept seems simply enough, "If I get disabled, the | | | | do something else, and therefore not pay your |
| insurance company should pay me." Therefore many | | | | benefits. As you can see, the three definitions are very |
| shoppers spend time comparing quotes from different | | | | different, and depending on your income and |
| disability insurance carriers, and trying to find the lowest | | | | occupation, the price could be different as a result. |
| price. The internet makes this task even easier when | | | | Residual or Partial Benefits |
| a shopper can simply search for disability insurance on | | | | There are so many variations to residual or partial |
| Google, and request free quotes from the top ten | | | | benefits that I could not possibly cover them all in this |
| search results. | | | | article. If you take anything away from this article, |
| According to statistics, 66% of the people who buy a | | | | make sure you understand when and how the residual |
| disability insurance policy in this way will never have a | | | | or partial disability benefits pay in your individual disability |
| problem because 66% of you will never become | | | | insurance policy. There are policies out there that allow |
| disabled for 90 days or longer before they retire. | | | | professionals an unlimited recovery benefit as part of |
| However, 33% of you will become disabled before | | | | their residual benefits. This means that any fee for |
| you reach the age of 65, and therefore will need to | | | | service professional would be paid under their residual |
| understand how the individual disability insurance policy | | | | disability rider for the entire benefit period until they |
| you purchased on-line will work. Buyer beware, not all | | | | financially recovered, not just until they physically |
| disability insurance policies work the same way. In fact, | | | | recovered. There are also policies that just pay a |
| no two policies are the same at all. | | | | straight forward percentage of the monthly benefit |
| Definition of Total Disability | | | | depending on your percentage loss of income, and |
| The first thing you need to compare is the definition of | | | | policies that pay a limited partial benefit. The scope of |
| total disability. This will dictate exactly what the | | | | benefits is extremely large, so make sure you |
| insurance company will pay out a total disability claim | | | | understand the differences before selecting a policy |
| for. While many carriers have slight variations on this | | | | on your own. |
| definition, there are essentially three major definitions in | | | | Inflation Protection |
| use in the market today. The most comprehensive is a | | | | My feelings on inflation protection are mixed. It is |
| Pure Own-Occupation definition of total disability. This | | | | something you always want to have if you are on an |
| definition will result in you being paid the total monthly | | | | extended long term disability insurance claim, however |
| benefit if a sickness or injury prevents you from being | | | | if you only have a short term claim it is not going to |
| able to perform the material and substantial duties of | | | | help you. If you are younger, I recommend purchasing |
| your regular occupation, even if you are engaged in | | | | this option every time because there is a longer period |
| some other capacity. The middle definition is a modified | | | | of time that inflation could affect your benefit amount |
| own-occupation or income replacement definition. The | | | | while on claim. If you are older, feel free to make your |
| definition will begin the same way as a pure | | | | own decision. You can always buy it now, and drop it |
| own-occupation definition does, except for the last | | | | later on in life when inflation is not much of a threat to |
| sentence which will say so long as you are not | | | | you. |
| engaged in any other occupation. This means the | | | | I hope some of these tips help you make an educated |
| policy will pay you so long as you are not earning any | | | | decision when purchasing your own individual disability |
| earned income while on a claim. The third major, and | | | | insurance policy. It is not a contract where browsing by |
| least comprehensive, is the gainful occupation definition | | | | price will give you the best deal, it will only mean you |
| which starts the same way as the previous two, | | | | bought the cheapest disability insurance policy out |
| however adds the language are unable to perform | | | | there. |
| any occupation for which you are qualified by | | | | |