There are several important factors that will determine the cost of the insurance. The following information is from an article written by Janet M. Washburn, a financial planner, on zwire.com:
Occupation - The more day-to-day hazards involved in your occupation, the higher the premium. For example, someone who works with heavy equipment will pay more than someone who works primarily at a desk. Also, many occupations such as chiropractors, dental assistants, dental hygienists, beauticians and jewelers may pay a higher premium than accountants and attorneys, due to the fact that a relatively small occurrence such as a sprained finger or a strained back can prevent them from working at their occupation.
Health - A person with a history of potentially disabling conditions will usually have to pay more for disability than one without such history. A brief list of such conditions would include, but would not be limited to, back/spinal injuries or disorders, arthritis, asthma, heart conditions, etc.
Benefit Period - The amount of time for which the company will pay for a disability. A benefit period for two years will cost substantially less than a lifetime benefit period.
Elimination Period (Waiting Period) - The amount of time you must be disabled before a benefit is payable. The most common elimination periods are 30, 60, 90 and 180 days. For example, with a 90-day elimination period, a person must be disabled for 90 days before benefits are payable. Once the 90-day elimination period has passed, payments begin retroactive to the first date of disability. Waiver of Premium (which is a separate feature) will refund premium paid for the first three months, once the elimination period has been satisfied.
Policy Provisions - For example, a policy that pays both total and partial disability will cost more than one that pays only for total disability.
Benefit Period - The amount of time for which the company will pay for a disability. A benefit period for two years will cost substantially less than a lifetime benefit period.
Elimination Period (Waiting Period) - The amount of time you must be disabled before a benefit is payable. The most common elimination periods are 30, 60, 90 and 180 days. For example, with a 90-day elimination period, a person must be disabled for 90 days before benefits are payable. Once the 90-day elimination period has passed, payments begin retroactive to the first date of disability. Waiver of Premium (which is a separate feature) will refund premium paid for the first three months, once the elimination period has been satisfied.
Policy Provisions - For example, a policy that pays both total and partial disability will cost more than one that pays only for total disability.
This is a primer for those that know next to nothing to little about disability insurance. Before purchasing a policy make sure and consult with a trusted financial planner or insurance agent. Do your research so you are better prepared when meeting with an agent.
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