Ways to Save Money on Disability Insurance
This week, I’d like to welcome 1752 Insurance to teach us what factors affect the price of disability insurance premiums and how we can save some money. Also, if you’ve wondered what the big deal was about “own occupation” insurance, read on!
This is a sponsored post.
There are a number of factors that can play into the cost of a disability insurance policy and as a Frugal Physician, you would want to maximize your benefits with the lowest cost. This post breaks down many of the factors that influence the cost of a policy and how to get a policy that fits your specific needs.
Factors that Affect the Price of Disability Insurance
Your age plays a major role in the cost of your policy. The younger you are, the less you will spend on coverage. Waiting to get coverage adds to the cost.
A policy’s elimination period is the amount of time you need to wait between getting sick or hurt before collecting your disability benefits. The amount of time generally ranges between 30 days to one year, with most people selecting either 90 or 180 days. The longer you have to wait for your benefits to start, the less expensive the policy is.
The length of time you receive your benefits also plays a role in the cost of the policy.
Options generally include five or ten years of benefits or up to a certain age, like age 65, 67, or 70. Policies with longer benefit periods have higher premiums. Most people select benefits to age 65.
Definition of Disability
Definition of disability is the criteria you have to meet to receive your disability insurance benefits.
Here is a brief explanation of the three most common:
True Own Occupation
True Own Occupation means you receive your benefits if you are unable to work in your specific specialty, even if you are working another job. For instance, if a surgeon injures their hand and can no longer work as a surgeon, they are still considered disabled and receive benefits if they choose to start teaching or consulting.
Own Occupation and Not Working
Own Occupation and Not Working means you do not receive benefits if you take up any other occupation. For example, if a surgeon can no longer work in the OR but starts a position as a telehealth physician, they will not receive their benefits.
Any Occupation means you only receive benefits if you are unable to work in any position. This definition of disability is the least likely to receive benefits.
True own occupation adds the most to the cost of the policy, but is generally recommended for physicians due to the unique nature of their specialities and ability to receive benefits even if working another position
There are a number of riders that can be added to a basic disability insurance policy. These optional additions increase the cost of a policy but enhance the benefits.
Some common riders include:
Cost of Living Adjustment
Cost of Living Adjustment increases your monthly benefits to account for inflation. This rider generally has a choice between 3% and 6%.
Future Increase Option
Future Increase Option means you can increase your policy’s benefits if your salary goes up. This rider is common for residents and newer physicians as salary increases can be significant.
Automatic Increase Rider
Automatic Increase Rider increases your benefits by a percentage (usually 5%) each year for a set number of years, regardless of salary increases.
You can receive up to a 20% discount on your policy if you get it through a qualifying association. As a physician, there are many ways to qualify for these discounts and an insurance agent like Matt Brotherton at 1752 Insurance can help you find the discounts you are eligible for.
1752 Insurance specializes in offering our physicians a discounted product and shopping the market for your needs. We help customize your policy based on your specific situation, and are available to educate you on all of your options throughout the process and beyond. Request a quote by filling out a short form on our site or contact us by phone (804-651-0521) or email.
Standard Disclaimer: This is a sponsored post. Not meant as individualized financial or medical advice.