What to Look for in Disability Insurance

Shawn Plummer

CEO, The Annuity Expert

Understanding Coverage Amount

The coverage amount is a critical aspect of disability insurance. It determines the benefit you’ll receive if you become unable to work. Typically, it’s a percentage of your current income, often around 60-70%. For example, if your monthly income is $5,000, a 60% coverage plan would provide a $3,000 monthly benefit.

Policy Duration

Disability insurance policies vary in duration. Some cover short-term disabilities (a few months to a year), while others are long-term (several years or until retirement). Choose based on your financial stability and the nature of your job. For instance, a physically demanding job might warrant longer coverage.

Definition of Disability

Policies differ in how they define “disability.” Some offer “own occupation” coverage, paying benefits if you can’t perform your job. Others have “any occupation” coverage, only paying if you can’t perform any job. If you have specialized skills, “own occupation” coverage might be more suitable.

What To Look For In Disability Insurance

Waiting Period

Also known as the elimination period, this is the time between becoming disabled and when benefits start. It can range from 30 days to several months. Shorter waiting periods generally result in higher premiums. Consider your emergency savings when choosing: more savings might allow a longer waiting period, reducing premiums.

Policy Riders

Riders are additional benefits you can add to a policy. Common ones include cost-of-living adjustments (COLA), which increase your benefits with inflation, and residual benefits, which cover partial disability. Assess your specific needs and future concerns when considering riders.

Premium Structure

Premiums can be level (same throughout the policy) or graded (increase over time). Level premiums are initially higher but provide long-term cost certainty. Graded premiums start lower but increase, potentially becoming more expensive in the long run.

Disability Insurance Features

Insurance Company Reputation

Consider the insurer’s financial strength and customer service reputation. A financially stable company ensures reliability in paying claims. Customer reviews can provide insights into the claim process and overall customer satisfaction.

Disability Insurance Features

Coverage AmountHighTypically 60-70% of income; crucial for financial support
Policy DurationVariableDepends on personal and job-related factors
Definition of DisabilityCritical“Own occupation” vs. “Any occupation”
Waiting PeriodHighShorter periods mean higher premiums
Policy RidersOptional but UsefulCOLA, residual benefits, etc.
Premium StructureVariableLevel vs. graded; impacts long-term affordability
Insurer ReputationHighFinancial stability and customer service are key


Choosing the right disability insurance involves understanding key features like coverage amount, policy duration, and definition of disability. Assessing your personal and professional needs is crucial in selecting the right waiting period, policy riders, and premium structure. Prioritize insurer reputation for a reliable claims process. This guide should equip you to make an informed decision about disability insurance.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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