What Professionals Need to Consider When Purchasing Long Term Disability Coverage

Part 1 of 3

For the majority of successful professionals such as physicians, dentists, attorneys, investment bankers and other high-income executives, the purchase of long-term disability policy is generally regarded as a necessity rather than an option. As incomes increase over the years, families grow, and expenses escalate, and the possibility of losing that substantial income due to a disability can be daunting and difficult to face.

As a result, here are some tips for high-earning professionals considering purchasing a disability policy and some pointers for those who may have already purchased coverage:

1) Know THE ODDS

- According to the Council for Disability Awareness, over 25% of today's 20 year-olds will become disabled before they retire.

- Approximately 95% of disabilities are caused by illnesses rather than accidents.

2) KNOW YOUR NEEDS

- 44% of U.S. families are spending more than they earn. If you're among them, purchase adequate coverage to replace your income and don't expect to be able to subsidize it with earnings from retirement portfolios.

- Anticipate how much you and your family are likely to need as your income increases and add coverage accordingly. Ask about COLA (cost of living adjustments) that can make a significant difference in the amount of benefits received when disabled and find out if residual benefits riders are appropriate for your needs.

- Consider purchasing FIOs (Future Increase Options) that allow you to increase your coverage on an attained age basis, without having to provide evidence of insurability. You never want to find yourself with earnings that have increased significantly, that cannot be protected because you can no longer purchase coverage, based on poor health that makes you ineligible for additional coverage.

UNDERSTAND INSURER(S) AND CONTRACTS DIFFER

- Disability policies are NOT all created equal. As legal contracts, they can be filled with countless options, confusing terminology, multiple definitions of disability, criteria for exclusion, renewability, premium increases, etc. Seek an independent disability professional to help you understand your policy before you purchase it; one who will also be available for consultation as your income stream increases and you add coverage.

- Lifetime benefit riders make a HUGH difference to disabled claimants no longer able to continue working and generate income. In is not unusual for high income professionals to develop a lifestyle that is more than just difficult to change if they should ever become disabled.

Consider these tips when purchasing coverage, but when it comes to filing a claim that's a horse of a different color.

Should you ever need to file a claim for disability benefits, consider engaging a professional Disability Claims Consultant who has an an expert's knowledge of the claims filing process and the experience to help you successfully navigate through the complexities of the claims filing process.

All prospective claimants need to research how consultants work; how and what they charge and most importantly they need to determine if they feel comfortable with not only how they work but if their personalities are compatible so that they can proceed in what is a critical relationship they will establish with the claims consultant over the course of this process.

If that rapport is lacking, it will jeopardize the success of getting the claim(s) approved, in which case the claimant should explore working with other claims consultants, until they find one that meets their criteria as the customer.

Long term disability insurance is a necessity for high-net-worth professionals, to protect their dignity and lifestyle should they ever become disabled. It is therefore imperative that they force themselves to make the time needed to research the numerous benefit options and determine which are most suitable for their situation. Find an insurance professional who specializes in selling disability insurance to guide you through the process and work with you as your professional career progresses.

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