Online Underwriting – Tips to Avoid Potential Pitfalls

Recently, several disability insurers have started to introduce new online applications in an effort to make purchasing disability insurance more convenient.  Some of them even offer automated underwriting and instant approval of your application.  In connection with the online applications, insurers are also providing more flexible options regarding benefit amounts and benefit periods.

While online applications will likely make purchasing disability insurance more convenient, here are some tips to keep in mind and some pitfalls to avoid.

  1. Don’t neglect to shop around. While it will certainly take less time to just apply to the first website you come across, you should always look at what multiple companies are offering before you apply for disability benefits.  While it may not seem like it at the time, the decision to purchase disability insurance may be one of the most important decisions in your life if you end up becoming disabled.  So make sure to take the time to research what your options are, so that you can be sure to get the best disability insurance policy you are able to.
  1. Do the research. If you are merely interacting with a computer screen, you will not be able to ask questions about particular policy provisions.  Consequently, you should take the time to do outside research so that you know exactly what to look for and what to avoid in a disability insurance policy.
  1. Don’t sacrifice important provisions for convenience or affordability. There are certain provisions that every doctor and dentist should have in their policy, such as an own occupation provision.  If the online policy does not offer the provisions you need, don’t settle for the sake of convenience or affordability.  Remember, if you end up becoming disabled, you will not just want any disability policy—you will want the best disability policy.
  1. Take your time when you are filling out your application. Most disability insurance policies contain language that allows the insurer to void the policy if you make material misstatements in your application.  Many people tend to rush through online applications, particularly if their priority is convenience.  Make sure that you double check your answers before you submit the application, to ensure that everything you are submitting is accurate.
  1. Periodically reevaluate your coverage. If your initial goal is affordability, make sure that you periodically reevaluate your coverage to ensure that it is still sufficient for your needs. Many people initially apply for low benefit policies and neglect to increase their benefits amounts later on when they can afford to pay higher premiums.  Consequently, if they become disabled, their benefit amount ends up covering only a small fraction of their prior income.

These tips are particularly important for physicians and dentists to remember when applying for disability insurance, because insurance companies are particularly aggressive towards disability claims filed by doctors and dentists.  Additionally, many doctors and dentists are accustomed to a high level of income.  Physicians and dentists who do not purchase enough disability coverage and later become disabled can find themselves unable to meet their obligations and care for their family, even if their disability claim is approved.  Additionally, as we have discussed in previous posts, in some cases, a single word in a disability insurance policy can determine whether you receive benefits.

So remember, purchasing disability insurance is not something that should be taken lightly.  Take your time, and get the best policy you can.

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