Disability Income Insurance: What should I look for in a policy? Rates? Length?

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Question:

I have never purchased disability insurance outside of a group policy. I'm 31, married with two young children. I'm self employed and earn about 200k per year. I would like a disability policy in the event of anything tragic happening. 

I'm healthy and don't participate in any activities that are typically considered "dangerous" (skydiving, motorcycle racing, etc.) if that matters. I'm in California.

What should I look for in a policy? Rates? Length?

My biggest concern is that if something happens the insurance company will claim that it's not covered and deny the claim.

Answer:

In your search for disability insurance, what you should look for is key definitions within the plans:

Own Occupation: does it state the inability to perform the material and substantial duties of your occupation, and in addition gainfully employed in another occupation.

The reason this is important is lets say if You can not work in the present occupation, but you are able to work doing something different, with this definition it means that the company would have to pay the claim as a total disability, while you work in a different occupation.

Residual Disability is a partial benefit, and they are all different, some companies will pay as long as your partially disabled, and pay the percentage of the benefit difference through the benefit period, usually age 65 or 67, others will cease paying after a period of time, thus if you became disabled and received partial benefit, and the period is 3 years, that means that after 3 years the benefit will cease even though your rebuilding the business, while some will pay as long as your income is below a percentage of your prior income.

Since your self employed, they will at least look for 2 years tax returns to verify individual income, and besides a personal disability plan, there is also business overhead expense coverage which will pay for office expenses as well as your replacement. 

If you have more questions please feel free to ask me or call me at 813 964 7100 or email me at mminter@mintcofinancial.com

I also can run a quote for you since I am an independent advisor and will shop among top companies t get the best rate.

Call me at 813 964 7100

www.MintcoFinancial.com