What’s Involved in Getting Disability Coverage?

While some insurance companies have a few company-specific guidelines for underwriting disability insurance policies, all insurers will use the same key factors in determining your eligibility, rate, and amount and type of coverage.  Understanding what an insurer looks at during the underwriting process can help you get the disability coverage you need.

  • Gender and Age Male applicants usually pay less for their policy than females because males tend to file fewer claims than females. Older applicants typically pay more for their policy than their younger counterparts.
  • Lifestyle Your lifestyle, in particular any activity that you participate in that could increase your probability of suffering a disabling accident, will be questioned. The insurer will directly ask you about your activities, but be careful to be honest since they may also collect information about your lifestyle from credit bureaus, internet databases, and even your family or friends.
  • IncomeYour income will be instrumental in determining what type of coverage you’re eligible to receive, the rate, and the monthly benefit amount. The insurer will ask you to provide proof of income, such as a W2 or income tax form. The insurer will put your salary information into a table and decide the monthly benefit you’ll be eligible to receive. The amount is usually between 50% and 70% of your pretax income, with higher percentages accompanying lower incomes and lower percentages accompanying higher payments. Additionally, your income amount will affect the coverage the insurer offers you. Those with higher income levels are usually offered a policy with more comprehensive coverage and a broader definition of disability.

What Next

Once the insurer has collected all the above information, a home office underwriter will review it and either issue you immediate coverage or ask you to submit some additional information to assess if you’re an acceptable risk for them. The insurer will assign you to one of the following risk categories:

  • Standard risk – most disability coverage applicants fall into the standard risk category.  This means they are no less or more likely to file a claim than any other person.
  • Preferred risk – the insurer has determined that you’re less likely to file a claim than other insured individuals. You will pay the least amount for preferred risk coverage.

Call or text Brian Gruss at 352-508-4221 to discuss your disability insurance options, don’t wait until it’s too late.