A Few Thoughts on Disability Insurance

It is said that the most important asset anyone has is the ability to earn an income. The product or solution to insure any loss of income is disability insurance. In the 30+ years that I have been selling disability insurance there have been changes in the marketplace as well as the way I view disability insurance.
 
Today, if one were to ask me what they should do for disability insurance I would recommend the following:
 
First, look to any organization that you belong to for a group disability plan.  Now, many insurance “professionals” will tell you that these plans are worthless compared to individual policies, I believe however this is not the case. Granted individual plans are non-cancellable and guaranteed renewal, and most have own occupation definition of disability throughout the contract.  Whereas group plans have increasing premiums over time and most have a time limit to own occupation definition of disability.  In my view, these differences do not warrant the incredible difference there is in the premiums for the individual plans vs. group plans written through associations.  
 
Remember, with disability insurance one size does not fit all.  If you have a young Doctor or business owner who is in very good health and has a bright income producing future, then individual disability might be a better fit for this client.  But, for the majority of your clients the group plans will likely be the best bet.  If your client does not have affiliation with an association, or the association they belong to does not have a group disability policy then their only option may be an individual plan
 
If your client owns a small business, and does not have access to a group plan through any affiliations or associations, there is the potential to put in a group disability policy through the business.  You need as little as three people to put a group plan in place.
 
Please remember when it comes to underwriting disability insurance you can always write group on top of individual, so if the individual is too expensive, cut the benefit in half and put that in force and then supplement the difference with an association or business group policy.  This way you get the best of both worlds without overpaying in premiums.
 
If you are in the process of reviewing your client’s current disability coverage, or lack thereof, feel free to reach out with any questions.  I would be happy to take a look at the coverage and prepare a comparison for your planning.