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Disability insurance provides working professionals with protection against the financial risk of someday being unable to work due to a sickness or injury. If a sickness or injury prevents you from working, disability insurance can provide monthly benefits intended to replace a percentage of your pre-disability income. In order to obtain an individual disability insurance policy consumers should be in fairly good health and must undergo a process known as underwriting. For consumers interested in obtaining coverage, below is an explanation of what you should expect during the application process.
Completing the Application for Insurance
There are still some agents that prefer to complete insurance applications during an in-person meeting, but in many cases the application can be completed by phone and electronically. An application for disability insurance will generally range between 11-25 pages covering a great deal of issues including your personal information, work related information, medical history and a general risk assessment. In addition to answering questions, an applicant must also sign specific authorizations which allow for the insurance company to review any medical information necessary to thoroughly underwrite the application. At the point of submitting your application you should also be prepared to provide financial documentation to prove your current income.
There are still some agents that prefer to complete insurance applications during an in-person meeting, but in many cases the application can be completed by phone and electronically. An application for disability insurance will generally range between 11-25 pages covering a great deal of issues including your personal information, work related information, medical history and a general risk assessment. In addition to answering questions, an applicant must also sign specific authorizations which allow for the insurance company to review any medical information necessary to thoroughly underwrite the application. At the point of submitting your application you should also be prepared to provide financial documentation to prove your current income.
Insurance Medical Exam
Depending on the amount of disability insurance being applied for, most consumers will be required to complete an insurance medical exam which is provided by a paramedical service. The medical exam can be conducted at your home or work place and generally includes regular lab work, a shortened medical exam and a thorough questionnaire regarding your medical history. This is a similar medical exam to that which is required for life insurance.
Depending on the amount of disability insurance being applied for, most consumers will be required to complete an insurance medical exam which is provided by a paramedical service. The medical exam can be conducted at your home or work place and generally includes regular lab work, a shortened medical exam and a thorough questionnaire regarding your medical history. This is a similar medical exam to that which is required for life insurance.
Personal History Interview
Although it may seem tedious and extremely repetitive, the final data gathering stage is known as a personal history interview or phone interview and includes questions very similar to those on the application. The interview will be conducted by a third party representing the insurance company and the interview results will be sent directly to the insurance company for review.
Although it may seem tedious and extremely repetitive, the final data gathering stage is known as a personal history interview or phone interview and includes questions very similar to those on the application. The interview will be conducted by a third party representing the insurance company and the interview results will be sent directly to the insurance company for review.
The "In-Between" Stage
Once this information has been received, the insurance company will begin a thorough review process and may even order medical records directly from your current and prior physicians if needed. This stage can vary in timing and often makes up the majority of the application process - between two to four weeks. Although it may not take more than a few days for documents and medical records to be reviewed by an underwriter, it can take a few weeks to obtain the actual medical records from your physician's office. Try and be patient during this time as much of it will be out of your or your agent's control.
Once this information has been received, the insurance company will begin a thorough review process and may even order medical records directly from your current and prior physicians if needed. This stage can vary in timing and often makes up the majority of the application process - between two to four weeks. Although it may not take more than a few days for documents and medical records to be reviewed by an underwriter, it can take a few weeks to obtain the actual medical records from your physician's office. Try and be patient during this time as much of it will be out of your or your agent's control.
Receiving and Reviewing Your Offer
Following an in depth review of your personal, medical and financial situation the insurance company will either decline or approve your application and make an offer. Consumers should review their approval carefully as this will provide the true parameters of the benefits being provided by the policy. Although you may have initially applied for one thing, you could be approved for something slightly or completely different. Any changes that have been made will require your signature as a form of acknowledgement so be sure to review the policy, the policy summary and any amendments with your agent before signing these forms.
Following an in depth review of your personal, medical and financial situation the insurance company will either decline or approve your application and make an offer. Consumers should review their approval carefully as this will provide the true parameters of the benefits being provided by the policy. Although you may have initially applied for one thing, you could be approved for something slightly or completely different. Any changes that have been made will require your signature as a form of acknowledgement so be sure to review the policy, the policy summary and any amendments with your agent before signing these forms.
This summarizes the disability insurance application process. Be patient and apply knowing that underwriting will take a total of four to eight weeks on average. The most important thing is that this will provide you and your family with the income protection and financial security needed, against the risk of disability.
Michael L. Relvas, CFP® is the owner of MR Insurance Consultants and also the creator of the Buyer's Guide to Disability Insurance for Physicians. For more information or assistance in applying for coverage, contact Michael at 800-817-4522 or visit disability insurance.
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