Top 5 Disability Questions

1. When will payments for a disability begin?
Generally, most long-term disability policies do not begin paying benefits immediately—the time you must wait for benefits to begin is known as the “elimination period” or “EP.” The most common elimination period lengths are 30 days, 90 days, or six months after a disability occurs. A longer elimination period usually means a lower premium.

2. How Long Will My Payments Last?
Similarly, a disability insurance policy will specify the maximum length of time benefits can last. Typical options are two years, five years, 10 years, or until retirement. The longer the maximum benefit period, the higher the premium will be, but the better you’ll be covered against unexpected events in life.

3. How Much of My Income Will be Replaced?
A disability insurance policy will generally not replace all of your income as your insurer will want to maintain a financial incentive for you to return to work. Policies typically range from 40 percent to 65 percent of your pre-disability earnings at the time of purchase. If you earn commissions and bonuses, these are normally not included.

4. What Disabilities Are Covered?
Every policy will have a “definition of disability” that explains what must happen in order for you to qualify for benefits. The key is whether a disability stops you from working, and what type of work it stops you from doing.
For example, a policy with an “own occupation” definition will pay benefits if your disability stops you from doing the job you had at the time of disability. However, a policy with an “any occupation” definition will pay benefits if your disability prevents you from doing any work for which your education and experience are appropriate.

5. What are factors affect my disability premium?
Age, health history, occupation, and current income will all factor into the cost of the premium.