Build Your Own Insurance: What to Look for in a Policy

Recently, insurers have started to allow consumers to build and personalize their own insurance policies online. For instance, Guardian recently announced the launch of its online insurance quoting tool. According to Guardian, the tool “educates clients on the costs for various options based on age and occupation, demonstrates how adding or removing certain options affects pricing, and shows how to create the plan that best matches their individual needs.”[1]

If this “build your own insurance” concept catches on, consumers may have much more control over the terms of their policies than they have had in the past. Accordingly, in this post we are going to talk about things to look for in a policy, and some things to avoid in a policy.

Things to Look for in a Policy

Generally speaking, here are a few things that you will want to look for when selecting a policy:

  • Make sure that the policy provides for lifetime benefits.
  • Try and find a policy with a COLA (cost of living adjustment) provision. This provision will increase your potential benefits by adjusting for inflation as time passes.
  • Make sure that you get the highest benefit amount you can afford. Remember, if you’re unable to practice, your monthly disability payments may be your only source of income.

Things to Avoid in a Policy

Generally speaking, here are a few things that you should avoid when selecting a policy:

  • “No Work” provisions that only provide benefits if you are unable to perform the material and substantial duties of your own occupation and you are not working in any other occupation.
  • Substance abuse exclusions.
  • Provisions requiring you to apply for Social Security benefits.

Remember, purchasing disability insurance is no different than any other significant purchase.  Be sure to take your time and obtain quotes from multiple insurance companies before making a final decision.

For more information regarding what to look for in a policy, see this podcast interview where Ed Comitz discusses the importance of disability insurance with Dentaltown’s Howard Farran.

[1] See http://www.businesswire.com/news/home/20151028005074/en/Guardian-Empowers-Consumers-Build-Disability-Insurance-Coverage.