Before a Purchase After a Purchase Before a purchase Before purchasing an individual long-term disability income insurance policy, evaluate the benefits you already may be eligible to receive from your employer, the government, or other programs. If you determine that coverage available to you is too limited consider each of the points below before making your final purchasing decision. Look for a company that is reputable and financial strong.  A number of insurance rating services rate the financial strength of companies, and such information can be obtained from your agent or from public or business libraries. Rating agencies include A.M. Best Company, Fitch Ratings, Moody's Investor Services Inc, Standard & Poor's Insurance Rating Services, and Weiss Ratings. Make sure you understand the definition of disability in your policy. How does this policy define disability? Must you meet two or more definitions, for specific periods of time, before you collect benefits? Some policies pay benefits Others pay benefits if you are unable to perform the major duties of your own occupation. Others pay only if you are unable to complete the duties of any occupation for which you are reasonably qualified by training, experience, and education. Some policies pay benefits only if you are disabled due to an accident, not an illness. Shop around to compare costs. Before purchasing long-term disability income insurance, find out if you have coverage through your employer. Some employers pay a percentage of your salary—generally 50 to 60 percent—if you become disabled and can’t work for six months or more. Ask for outlines of coverage before making a purchase so you can compare the features of several policies. Each feature affects the cost of the policy. Find out the conditions governing benefit payments. Will the policy pay benefits if you are unable to earn a specified percentage of your salary? What is the percentage? Find out the benefit amount. Is the benefit from this policy a percentage of your regular income or a flat amount? (Policies that pay a flat benefit amount each month are common.) Make sure you know how long the elimination period is (the waiting period before benefits begin). Although some policies pay benefits immediately after the insured suffers a disability, most policies have a waiting, or elimination, period. Elimination periods can last six months or longer. The shorter the elimination period, the more costly the policy. Find out the length of benefit—how long you will receive benefits. Policies generally pay benefits until retirement age, but shorter benefit periods are available at lower cost. Find out if there are benefits for partial disability. Some policies provide benefits when you have a partial disability that keeps you from doing part of your job or working full time. Ask if the policy provides replacement of lost income. Some policies provide a benefit to make up for your loss in income if you must take a lower-paying job because of your disability. Investigate provisions for return-to-work or rehabilitation programs. Some policies have return-to-work or rehabilitation provisions whereby the insurer pays for training, modifications to your work environment, or other services that will assist you in returning to work. Are there provisions for relapses (a reocurring disability)? Most policies don’t require you to wait before receiving benefits if you go back to work after recovering from a disability and have a relapse within a specified period, such as six months. Find out if the policy includes cost-of-living adjustments or if you have the right to purchase additional coverage. A cost-of-living adjustment benefit provides for periodic increases in the amount paid, usually corresponding to increases in the cost of living. Are mental health/substance abuse provisions included in the policy? Policies usually pay benefits for a maximum of two years for disabilities resulting from mental illness or substance abuse. However, these limits usually don’t apply when substance abuse or mental health problems require institutionalization. Find out conditions of coverage for mental illness or substance abuse. Is the policy noncancellable or guaranteed renewable? Both types can usually be renewed until age 65, and neither can be canceled by the insurer as long as the premiums are paid. Under a noncancellable policy, premiums can never be increased; with a guaranteed renewable policy, premiums can be raised if they are raised for an entire class of policyholders. Find out about exclusions or coverage limitations (Some policies will reduce benefits if you are receiving benefits from another source.) Fill out your application accurately. Always answer questions about your medical history and health completely and truthfully. If you are dishonest, the company may later be able to cancel your coverage. Check the date that the insurance becomes effective. Make your check payable to an insurance company, not an agent, broker, or salesperson. Do not pay with cash. After a Purchase Use your free-look period to re-read your contract and double check your calculations and application information. A “free-look” period (usually 10 days after you receive the policy) is a period when you can change your mind. If you decide not to keep you policy, the company will cancel the policy and give you a refund. Contact the customer service division of the company if you have a concern or complaint about your agent or company. Most departments have a toll-free number for their consumer affairs division. If you are still dissatisfied, after talking to the company, contact contact your state insurance department.