Disability Life Insurance – Stability for When You're Down

Disability life insurance is something we don't often think about when things are going well, but many times wish we had when catastrophe strikes. Obtaining disability life insurance is a small price to pay for the peace of mind of knowing that your family will be protected and your mortgage and other bills will be covered if something happens and you are unable to work.

Three Questions you Should ask About Disability Life Insurance

There are three critical questions you will need to answer as you shop for your disability life insurance policy:
  • how much – The cost of your disability life insurance premiums are based in part on how much money you need paid out each month that you are unable to work. Determine the least amount your family can afford, taking into consideration any incidentals, to keep the premiums low.
  • what kind – There are several different kinds of disability life insurance policies available. Some pay only for major, long-term disabilities and others will pay even for time off for minor elective surgeries. The more liberal the policy, the more costly it will be.
  • pre-existing conditions – Most disability life insurance policies will try to exclude pre-existing conditions, so be sure you know where your health stands before you buy.
While you may have access to disability life insurance at reasonable rates through your employer, it's a good idea to shop around as well and see if you can find a better policy on your own.

Step 1 – Determine Your Expenses

To determine how much coverage you will need through your disability life insurance, add up all of your monthly costs, including your mortgage, insurance, car payment, dependent care, and other bills.  Subtract from that what your spouse contributes or could contribute. The remainder is the level you should seek to include in your policy.

Step 2 – Compare Policies and Companies

Choose an insurer or company you feel comfortable with, whether through your employer or independent.  Make sure the company offering the disability life insurance policy is reputable, stable, and capable of answering all of your questions.

Step 3 – Purchase Your Policy

Most disability life insurance policy premiums can typically be paid monthly, quarterly, or yearly. Check with your tax advisor to determine if the premiums might be tax deductible. Be sure you keep your policy documents in a safe place so that you know how to file for benefits when you need them.