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Purchase Your Policies

Disability insurance (DI) can help alleviate the financial burden by replacing a portion of your income if you become disabled. Be prepared for the uncertain economic times that could result from a disability by taking time to assess your DI coverage. Disability insurance protects your ability to earn a living. Especially in uncer-tain economic times, don’t underestimate the importance of insuring your paycheck.

Many employers offer group coverage without a medical exam if you sign up during the initial enrollment period. Some preexisting conditions may be excluded from group coverage for up to two years. Group DI (Disability insurance) is generally less expensive than an individual policy because most employers pay a portion of the premium. Some plans have a portability option that allows you to convert your group coverage to an individual policy when you leave your job.

You can purchase individual disability insurance directly from an insurance company or through an insurance broker. Unlike group insurance, you have to go through underwriting to get the policy. One of the greatest benefits of individual DI is that changes in your health, employment, or occupational class don’t affect your coverage after the policy is issued. Even if you become uninsurable in the future or switch to a risky occupation, your individual policy remains in force as long as you keep paying the premiums.

Don’t forget about taxes! If you pay the premiums for your policy, the benefits you receive are generally tax-free. If your employer paid part or all of the premiums, part or all of the benefits are taxable.