Disability Insurance Rates

For most people, insurance is a service that's used to reduce and eliminate risk. We buy home and contents insurance to keep our possessions and shelter safe; car insurance to keep our vehicle and our bank account safe in the event of an accident, and health insurance to ensure that we, and our families, are kept safe and secure in the event of a medical emergency or recurring health issue.

What we don't think of is insurance for other worst case scenarios – the type of insurance that offers protection, both medically and financially, in situations where we're left without a way to assist our loved ones with expenses and other challenges. In short, while we're incredibly skilled at picking up insurance policies that help us, we're not so good at helping others when we're no longer around.

A classic example of this is disability insurance – an insurance service that's close to essential in its importance for employees, adults, and anyone that provides for a family. Disability insurance offers protection, both financial and in its coverage of medical expenses, for anyone that's injured at work or in their personal lives and as a result, is no longer able to provide for and care for their family.

It's an important service, and disability insurance rates reflect this. The cost of a disability insurance plan, while generally lower than that of a life insurance or ongoing homeowners insurance policy, is far from cheap. However, given the immense amount of variation and different in peoples' lifestyles and living situations, it's very possible to get better disability insurance rates with the right strategy.

These six tips can help you find a more competitively priced disability insurance policy, enjoy a life of emotional and financial security as a result, and live without costly disability insurance rates to worry about. Disability insurance is, in short, an absolutely essential service for anyone that's the sole family provider. Protect yourself, and your children, by investing in a worthwhile policy.

Account for changes in cost of living, inflation, and other expenses
Disability insurance rates largely depend on what you expect to receive in return from your policy, and how you expect this return to change over time. Since the economic world isn't static, it's wise to invest in a policy that offers returns which change over time. This allows you to rest armed with the knowledge that your policy will offer financial security, regardless of macroeconomic events.

Speak with your insurance broker or agent about a policy which pays out a sum that's adjusted for Consumer Price Index changes and overall inflation. This allows you to know that you're going to be repaid a consistent amount in the event that a disability leaves you unable to continue working.

Make sure that 'disability' is properly defined within your policy
For most people, 'disability' isn't a vague term. It's a clear cut definition – one that describes any person that's left unable to work, walk, or otherwise function normally due to a physical issue, or occasionally a mental problem. Most people, however, aren't insurance companies. The term isn't quite as black and white as most people think, which can lead to frustrating disputes and lawsuits.

Before you purchase a disability insurance policy, make sure that the definition 'of disability' is clearly explained in your policy's contract. There's nothing worse than investing in a policy that fails to adequately cover you, all because your disability isn't considered severe or large enough.

Insure for the lifestyle you have now, not a lowest-cost lifestyle policy
There are two ways to calculate your cost of living. The first is to take all of your expenses into account, adding them up and calculating their value over a long-term period. The other is to use your current expenses as a benchmark, subtracting ones that aren't necessary or all that important.

When you're considering an insurance policy, it's the first 'cost of living' figure that you need to keep in mind, not the second. The objective of a disability insurance policy isn't to provide just enough to survive, but to allow you to live as you do now after a major accident or other event.

Are you an entrepreneur? Look into business disability insurance plans
Most disability insurance rates are calculated by looking at your current income, living situation, and outgoing expenses. For employees, this is a fairly simple process. Your paycheck is observed, your employer might be contacted, and your policy is calculated according to a consistent figure.

For entrepreneurs, however, this isn't always the situation. Many businesses experience dramatic changes in their income throughout a year, with customers disappearing and lucrative deals going another direction. As such, it's significantly less stressful (and less costly, in terms of your disability insurance rates) to look into a special insurance policy for business owners and entrepreneurs.

Think about how your current line of work could affect your premium
Do you work in a high-risk industry such as commercial forestry, manufacturing, or international travel? If so, your disability insurance rates could be higher than those of your peers that work in other sectors of the economy. Disability insurance, like other forms of insurance, is calculated by assessing the risk of each customer and the approximate value that the customer would require.

As such, a high-risk occupation could substantially increase your disability insurance rates. If you're concerned about the long-term cost of disability insurance, it could be worth considering going into a different line of work. Alternatively, seek a less risky occupation within your current industry.

Pick either a short-term or long-term plan depending on your needs
There are two types of disability insurance. The first is short-term disability insurance – a service that's typically purchased by people that could be temporarily exposed to risk. These policies aren't ideal for ongoing coverage, although they offer an inexpensive option for those in high-risk jobs or industries where temporary exposure to high-risk situations is fairly common.

The second is long-term disability insurance – a service that's typically purchased by employees or entrepreneurs looking to keep their family safe throughout their lives. This type of insurance offers a predetermined sum for either an extended period or the policy holder's entire life. It's best to pick the policy type that best suits your needs, not necessarily the policy that's suggested by your agent.

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