As a firefighter/paramedic in a busy urban setting, I can attest to the realities of disabling injuries. Through my observations, a disabling injury or sickness can occur to anybody, anytime, and without warning!

If your like most everybody, you probably take precautions in your daily life… you wear your seatbelt, you childproof your home, you have a working smoke detector.

Still, no matter how prepared you are, accidents do happen. A disability can be the outcome. A sports injury, a car accident, an illness, a problem pregnancy, a heart attack, a serious back injury — any of these situations can result in your not being able to work at your usual job. That, in turn, means a loss of income, even if you have a relatively sedentary job. According to a recent study, most people estimate they have only a 16% chance of becoming disabled during their working years1 in spite of the following startling facts:

• If you're under age 35, chances are one in three that you will be disabled for at least six months during the course of your career.
• Men have a 43% chance of becoming seriously disabled during their working years, woman 54%. At age 42, it is four times more likely that you will become seriously disabled than that you will die during your working years

Group Disability Policy?

Your employer– or association-sponsored group plan may not be all you think it is. It might, for example, insure you only if you are totally disabled, even though a partial disability could mean you were reduced to earning part-time income. Plus, one overwhelming advantage of personal DI insurance is that it cannot be reduced or terminated if you leave your current employer. You pay the premiums, you own the policy, and the benefits are paid directly to you.

Selecting a Policy

Selecting the best disability policy can be a formidable task, even for an experienced insurance agent or financial planner. Over the last decade, at least twenty carriers have exited the marketplace. Some of those that have remained, have redesigned their policies to be more contract driven than claims driven by changing their definitions, terms, conditions, formulas, etc. All of this makes it very confusing to the consumer, especially if they are "shopping the market". Proposals may gloss over, emphasize or de-emphasize one part of the coverage, all of which doesn't help when trying to make a comprehensive evaluation and comparison.

Elimination Period

The elimination period is a fairly easy choice to make. The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. For an individual disability insurance policy the industry has made the most attractive offer a 90 day elimination period. They will charge you with an extremely high rate if you choose to go with a shorter elimination period of 30, or 60 days. They will give you a price break if you can go longer than 90 days. While the cost of having a shorter elimination period is much higher, you will find that going with a longer elimination period does not save you much money at all for the risk you take on. It is my opinion that insurance carriers set it up so that the logical choice is a 90 day elimination. It is important that you understand once the elimination period has been satisfied, you receive actual benefit checks at the end of the month. In reality, a 90 day elimination period means you are four months away from getting any claims dollars on a disability insurance claim.

Benefit Period

A benefit period is the period of time you are eligible to collect benefits while on a disability insurance claim. If a sickness or injury occurs that prevents you from performing the material and substantial duties of your occupation, the elimination period begins. Once the elimination period has been satisfied, monthly benefit checks will begin to come in at the end of the month. The maximum amount of months that these checks can possibly come in is your benefit period. Your benefits stop when you return to work in your occupation, or depending on the contract to another occupation making the same income.

The most popular choice for a disability insurance policy is To Age 65. Almost 90% of the policies that I see on a daily basis are put in-force with this benefit period. The bottom line is if you are permanently disabled your last benefit check is on your 65th birthday. Obviously the lifetime benefit period will be more expensive, but often it is not much more expensive than the to age 65 policy. For those of you looking to save premium dollars on your disability insurance, a five year benefit period will cover the average length of disability which is about 3.2 years (1985 CIDTA). I never recommend a two year benefit period unless you already have another policy that has a two year elimination period.

FireLife Advantage

Many of our policies include these comprehensive volunteer options:

• Own Occupation – pays benefits if you are unable to perform the material and substantial duties of your own occupation due to sickness or injury... even if you are able to do some other kind of work.
• Non-cancelable and Guaranteed Renewable - What good is coverage that can be cancelled just when you need it most? These Life's policies stay in force as long as you keep paying premiums on time - and premiums are guaranteed to stay the same until age 65.
• Optional Benefit Riders - These optional riders, which can be added to your policy for extra value and protection. Consider a rider:
  • To receive benefits if you suffer an income loss from a partial, rather than total disability (Residual Disability Riders)
  • To have the option to increase your coverage once a year for a specified number of years (Future Increase Option)
  • To provide a 4% increase in your monthly benefits each year for five years at attained age premiums - insure your increasing income (Automatic Increase Rider)
  • To help your disability benefit keep pace with inflation (Cost of Living Adjustment Rider, or COLA)
  • To help if you lose your employer sponsored long-term DI coverage (Group Disability Insurance Replacement Rider)
  • To help maintain your coverage if you become unemployed (Unemployment Premium Waiver Option Rider)
  • To work alongside Social Security benefits (Social Insurance Substitute Rider)