© 2008-
SavingsNut.com™ – The Best Site On The Internet For Money Saving Tips & Frugal Living Ideas
Also Visit
“A Detailed Guide of Money Saving Advice & Budgeting Know-
“The best resource on the Internet to teach both young and old how to reduce everyday household expenses. Simply the best.” TSN
LIFE & DISABILITY INSURANCE -
Factors To Consider When Buying Life & Disability Coverage (cont.)
disability” for payments to be received, and some policies require only “partial disability” for payments or partial payments to be received. Also, some policies define “full disability” as not being able to perform your present occupation or a similar occupation in order to qualify for payments. Other policies define “full disability” as not being able to perform any kind of work at all. This is a major difference in policies, and should be thoroughly understood before purchasing a policy. It is very important.
f. The manner in which premium payments are made. Policies may be available with steady premium payments over the term of the policy or, with varying payments depending on age. Because benefits stop at around the age of 65, payments may very well decrease in later years due to the lesser number of payments that will have to be made upon disability. Annual, quarterly and monthly payment plans may be available that impact cost.
g. The age of the insured when the disability policy is purchased. Unlike life insurance, disability insurance does not necessarily get more expensive as you age. While age may increase the possibility of certain causes of disability, it lowers the total number of benefit payments that will be made prior to age 65.
h. The health status of the insured when disability insurance is purchased. Like life insurance, health status is an important determinant of the likelihood of disability.
i. Your occupation and activities also influence rates. Also like life insurance, the nature of your occupation and activities can influence the availability and cost of disability insurance.
j. Employer group disability plans may be a good deal. If you require short-
k. If you buy your disability policy from an insurance company where you have your life insurance policy you may receive a discount. You may also receive discounts if you buy life or disability policies from the same company where you purchase your homeowner’s and automobile policies. Just ask.
Although life and disability insurance companies are regulated by your state insurance commission, their rate structures vary widely. So, it pays to shop around for the best rates, which could easily save you hundreds or thousands of dollars annually. Consider plans offered by your employer, as well as any associations where you have membership. But make sure you shop around for policies from other sources also. When shopping, keep the following in mind:
1. Meet with two or three of the major life and disability insurance companies such as Met Life or Northwestern Mutual. Work with these companies to figure out what types and amounts of coverage are right for you. Once you decide what coverage you want, get a quote from each of the companies based on this coverage.
2. Using the coverage descriptions discussed above, contact other major insurance companies and get a quote. If you qualify because of prior experience in the Armed Services, make sure to contact USAA to see what they have to offer.
3. Using the coverage descriptions, contact two or three independent insurance agents to get quotes. Independent insurance agents generally represent several different less well known, but reputable, insurance companies that may offer better pricing.
4. Using your coverage descriptions, go to the Internet and apply for coverage with some of the better known insurance companies that sell over the Internet to get a rate quote. You may also want to visit sites like Insurance.com where several insurance companies are represented, and rates can be compared.
5. Now that you have decided what types of coverage and amounts you want, and have found an insurer that you like, consider the following before making a final decision.
a. Because of state regulation, it is rare that an insurer will fail and not be able to pay your claim, but it does happen. So if you have decided to deal with a less well known insurer, and they are represented by an independent insurance agent, have that agent demonstrate to you that the insurer is financially secure. This will generally be done by showing the rating an insurance company has received from an independent insurance rating agency. If the company is not represented by an independent agent, or you are still concerned, call the State Insurance Commission to inquire or do some research on the Internet at insurance company rating sites like Moodys.com and AMBest.com.
b. While the company you are considering may be financially solid, they may or
may not have a reputation for settling claims in a hassle-
6. Unlike automobile and property insurance, now that you have chosen your insurance company you will most likely keep your insurance policy for many years to come. However, if your health continues to be good, you may want to shop around every few years to see if prices have come down. If so, inquire with your insurer to see if they can make a premium adjustment. Also, if you are considering buying more life or disability insurance you do not need to limit your search to the companies that carry your present policies. It is perfectly fine to have policies with different companies at the same time.
Previous Page
