How to Compare Disability Insurance Rates

The most important asset any working adult has is his ability to earn an income. Disability insurance fills the gap if you're no longer able to earn an income. A disability can occur from an illness or accident. As with any insurance policy, you want to make sure your coverage is tailored for your idividual needs.

Types of Disability Insurance

• There are two basic types of disability insurance: long-term and short-term. Short-term disability typically lasts up to six months; long-term usually lasts at least six months and, depending on the plan, can provide benefits for years.

Components of a Disability Policy

• Disability policies have a set monthly benefit amount. This monthly benefit is paid out over a set benefit period, which can be anywhere from two weeks to two years to several years, depending on the provisions of the policy. There is also an elimination period, which is a waiting period before benefits can begin.

Comparing Policies

• The policy premium is just one aspect of a policy. You also want to be sure you're comparing the same types of policies (long vs. short term). Policies also have riders, or additions, that can be added, such as a cost of living adjustment, which will increase your policy benefits each year. Examine each policy carefully for what is included and the exclusions. Additionally, look into the quality of the insurance company. You should check with the Better Business Bureau and rating companies.