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 Disability Income Buying Guide

Benefit Amount

This feature is the amount that the policy will pay to you should you become disabled.

Benefit Period

This will define how long benefits will be paid. It could be 5 years or until age 65. The length of benefits paid will be directly proportional to the cost of the policy.

Definitions of Disability

There are two general types of disability definitions that you should be aware of.

1. Own Occupation, or "Own-Occ" which states that in order to be declared disabled you cannot perform your particular occupation. Typically this would be the best as your earning potential will be greatest with your career skills.
   
   
2. Any Occupation, or "Any-Occ" which would stipulate that you are unable to perform any occupation.
   
   

Definition of Disability in Your Policy

This is an important part of any policy. Be sure you fully understand how disabled will be defined. As noted above, being unable to perform your present occupation is what you want.

Guaranteed Future Insurability

This feature allows you to increase your policy amount in the future as your income grows without having to formally re-apply.

Guaranteed Renewable Policy

This type of policy is guaranteed as renewable, as long as the premiums are paid, but the premiums can be raised for a class of policyholders through regulatory state approval.

Inflation Protection

Having this in your policy, which is typically offered as a rider, will factor inflation into your paid benefits. This should be seriously considered, as a monthly amount now will be quite different in value 20 years from now. Inflation riders are generally offered in two forms.

• Simple - the monthly benefit identified in the policy is applied to an inflation factor
  
  
• Compound - the inflation factor is applied each year to last year's amount.
  
  

Long Term Disability

This product would pay benefits up to age 65 or lifetime if available.

Non-Cancelable Policy

This type of policy will be guaranteed renewable, as long as the premiums are paid, and will have premiums that cannot be raised. It is often referred to as a, "Non-Can" policy.

Partial Disability Benefits

With this type of policy you would be paid a certain amount for a defined period of time when declared disabled.

Residual Benefits

With this type of policy you would be paid benefits that are proportional to your loss of income.

Short disability Disability

This would pay benefits for a specific period of time, for example 2 years.

Waiver of Premium

This feature allows for the premiums that you pay to be waived upon receiving benefits.

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Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice.  Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.