Disability Insurance

Disability insurance is a type of coverage that pays you a portion of your income if you become unable to work due to an illness or injury. It can help you cover your living expenses and protect your financial future. Here are some ways to save on disability insurance according to different sources.

• Add it to your life insurance**. Some life insurance policies offer disability riders that can provide additional benefits if you become disabled. This can be cheaper than buying a separate disability policy.

• Consider your riders**. Riders are optional features that enhance your disability policy, such as cost-of-living adjustments, residual benefits, or future purchase options. While they can provide valuable benefits, they also increase your premium. You should weigh the costs and benefits of each rider and only choose the ones that suit your needs.

• Reduce the number of policies and amount of coverage**. If you have multiple disability policies from different sources, such as your employer, a professional association, or a private insurer, you may be overinsured. You should review your policies and see if you can consolidate them or reduce the amount of coverage to avoid paying for unnecessary or overlapping benefits.

• Watch out for increases**. Some disability policies have level premiums, which means they stay the same throughout the policy term. Others have graded premiums, which means they increase over time based on your age, inflation, or other factors. You should be aware of how your premium is calculated and whether it will change in the future. You may be able to lock in a lower rate by choosing a level premium or paying annually instead of monthly.

• Consider a later start date**. The start date, also known as the elimination period or waiting period, is the amount of time you have to wait before your disability benefits begin after you become disabled. The longer the start date, the lower your premium. You should choose a start date that matches your emergency fund or other sources of income that can tide you over until your benefits kick in.

• Invest in a policy sooner**. The younger and healthier you are when you buy a disability policy, the lower your premium will be. This is because you pose less risk to the insurer and are less likely to file a claim. You should buy a disability policy as soon as possible, preferably before you develop any medical conditions that could increase your premium or make you ineligible for coverage.

• Stay healthy**. Your health status and lifestyle habits can affect your disability premium. Insurers may charge you more if you have pre-existing conditions, smoke, drink excessively, or engage in risky activities. You can save money by maintaining a healthy weight, quitting smoking, limiting alcohol consumption, and avoiding dangerous hobbies.

• Drive safe**. Your driving record can also influence your disability premium. Insurers may consider you a higher risk if you have a history of accidents, violations, or DUIs. You can save money by driving carefully, obeying traffic laws, and avoiding distractions behind the wheel.

• Take advantage of discounts**. You may be eligible for various discounts on your disability policy depending on your occupation, education, affiliation, payment method, or other factors. For example, you may get a lower rate if you work in a low-risk profession, have a college degree, belong to a professional association, pay your premium in full, or bundle your disability policy with other types of insurance. You should ask your agent or insurer about any discounts that may apply to you.

• Update your policy annually**. Your disability needs and circumstances may change over time due to life events such as marriage, divorce, childbirth, career change, retirement, or disability claim. You should review your policy at least once a year and make any adjustments that reflect your current situation. You may be able to lower your premium by reducing your coverage amount, changing your benefit period, dropping unnecessary riders, or switching to a different insurer.

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Disability Benefits: Protection against the Unexpected | Social Security Matters