Buying Tips

Examine how the policy defines a disability.

Ask for outlines of coverage so you can compare several policies.

Make sure you fully understand the policy.
A policy that does not provide the protection you need is not a good buy. Features to look for include:

  • Clear definitions of disability (own occupation vs. any occupation) Amount of benefits
  • Elimination period (the waiting period before benefits begin)
  • Benefits for partial disability
  • Provisions for replacement of lost income
  • Return-to-work programs
  • Recurrent (relapse) provisions
  • Cost-of-living adjustments (or the right to purchase additional coverage)
  • Mental health/substance abuse provisions
  • Noncancellable or guaranteed renewable options
  • Exclusions of limits on coverage

Check that the company and agent are licensed in your state. If you have concerns, contact your state insurance department. The National Association of Insurance Commissioners, an organization of insurance regulators from each state, can be found online at www.naic.org.

Look for a company that is reputable and financially strong. Several services rate the financial strength of companies. You can get rating information from your agent, online, or from public or business libraries. Ratings on websites are usually free, but there may be a charge for ratings provided by phone. Rating agencies include:

  • A.M. Best Company
  • Standard & Poor’s Insurance Rating Services
  • Duff & Phelps Inc.
  • Moody’s Investor Services

Fill out your application accurately. Answer questions about your medical history and health completely and truthfully. If you are dishonest, the company may be able to cancel your coverage.

Read your policy carefully to make sure it offers the coverage you need. For instance, some policies pay benefits only if you are disabled due to an accident, not an illness.

Check the date that the insurance becomes effective.

Make your check payable to the insurance company, not the agent, and get a receipt. Do not pay in cash.

Review your policy. You may have a “free-look” period (usually 10 days after you receive the policy) when you can change your mind. If you review your policy during the free-look period and decide not to keep it, the company will cancel the policy and give you a full refund.

Contact the customer service office of your insurance company if you have a complaint about your insurance agent or company. If you are still dissatisfied, contact your state insurance department.

Publications and Resources

Private Long-Term Disability Income Insurance. This fact sheet explains how private long-term disability income insurance offers paycheck protection and complements the safety net provided by the Social Security Disability Income program. (2018)

Disability Income Insurance: Financial Protection for You and Your Family. This guide outlines the features and costs of individual disability income insurance and offers tips and a checklist on buying the right policy for you. (2014)

Protection for the Unexpected. A serious illness or injury can harm more than your health--it can have an impact on your ability to work and meet your family's living expenses. This article explains how disability income insurance can help you avoid depleting your savings.

State Insurance Department Directory. State Insurance Department Directory, with contact information for 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. Includes names and phone numbers for key personnel and specific subject contacts.