Okay, so you have made the decision to purchase a disability insurance policy (great idea, by the way) and now you have about a half a dozen disability insurance quotes in front of you. After hours of reading these documents written in some foreign language (“insurance-ese”), you resort to your childhood method of selection – “Eeny, meeny, miny, moe,” and quickly pick out the “best” quote.
I can assure you there is an easier way to do this. First of all, work with a broker who represents multiple companies. Most brokers who specialize in disability insurance will be able to provide you with 4-6 disability insurance quotes from the top companies. Make sure the broker you select will be able to provide you with a side by side comparison of quotes, which will make your selection process easier.
Side-by-Side Comparison of Disability Insurance Quotes
This comparison should compare the most important policy features – Renewability provisions, definitions of total disability (own-occupation, any occupation, etc.) and residual disability (including a Recover provision) and how certain riders work, like a Cost of Living Adjustment and the ability to purchase additional monthly benefit without medical underwriting (future insurability), and others. Here’s an example of a two company comparison:
|
Policy Provisions |
Company A |
Company B |
|
XYS Policy |
ABC Policy |
|
|
Occupation Class |
4M |
4P |
|
Base Benefit (Monthly Indemnity) |
$5,000 |
$5,000 |
|
Benefit Period |
To Age 65 |
To Age 67 |
|
Elimination Period |
90 Days |
90 Days |
|
Renewability Provisions |
Non-Cancelable & Guaranteed Renewable |
Non-Cancelable & Guaranteed Renewable |
|
Total Disability Definition |
Own-Occupation |
Own-Occupation |
|
Residual Benefit |
Yes |
Yes |
|
Recovery Benefit |
Yes – For entire benefit period with a 15% earnings loss. |
Yes – for entire benefit period with 20% earnings loss. |
|
Cost of Living Adjustment |
Fixed 3% (compounded). Adjustments begin on the fourth anniversary of the policy. No cap. Upon recovery, increases remain on policy without additional premium. |
CPI tied; 3%. No cap. Plan design includes option to increase monthly benefit up to COLA increases at end of disability period (additional premium required). |
|
Option to Purchase Additional Benefits |
Annual options to age 55; maximum of 2 times base plus in-force with Berkshire-Guardian (3X for Residents). |
Annual options through age 51; all or part of a unit of increase can be exercised. |
|
Limitation on Mental/Nervous/Substance Abuse Claims |
No |
24 Month Maximum Benefit |
|
Company Ratings |
A.M. Best A+ + Standard & Poor’s AA+ Moody’s Aa2 Fitch Ratings AA+ |
A.M. Best A+ Standard & Poor’s AA- Moody’s Aa3 Fitch Ratings AA |
|
Monthly Premium |
$xxxxx |
$xxxxx |
|
Annual Premium |
$xxxxx |
$xxxxx |
If you would like disability insurance quotes from multiple companies with a comprehensive comparison of benefits, click on the “Get Disability Insurance Quotes” button at the top or bottom of this page.