How Can I Save Money on My Disability Insurance Policy?

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In this economy, people are feeling the pinch.  At the same time, people recognize more than ever the importance of protecting their income with an individual disability insurance policy. If they are having a hard time surviving on their current income, it would be even harder if they lost their income to a sickness or injury.

When shopping for a disability insurance policy, there are several ways to save money on premiums. Here are some ideas.

1)      Guarantee Renewable Contracts. These contracts can be as much as 20-30% less expensive than a non cancelable contract. In some situations, the only difference in the policy language is the company’s ability to increase the policy in the future. They do not increase premiums on an individual basis.  They can only raise premiums if they raise them for the whole block of business.

2)      Discounts. Where available, look for discounts. This can range from a 10-15% association discount to a 20% employer sponsored discount more significant unisex rate discount saving women up to 55% on their premiums. Set for Life has the nation’s largest portfolio of discounts. For more information, visit our discount page here.

3)      Remove some riders. Prioritize and determine which riders are crucial and which are more of a luxury. For instance, the COLA, cost of living rider, can be very expensive. While it is important for benefits to keep up with inflation while on claim, determine the cost vs. benefits in your situation.

4)      Look hard at your monthly benefit needs. The largest cost item in your disability insurance policy is the base monthly benefit. If you are paying premiums from a personal account, the premiums are non taxable. Therefore, determine how much monthly benefit you really need after taxes.

5)      Shorten the benefit period. If you are in your 40s or 50s and already have money socked away for retirement, consider a shorter benefit period such as a 5 year benefit. This can reduce your premiums quite a bit.

6)      Look at graded or step rate premiums. Some companies offer different payment methods. With graded or step rate premiums, the premiums are less expensive initially and increase over time. Keep a close eye on these if you plan to keep the policy for the long term as they can end up costing more than a level premium. However, these can help you initially save on your premiums.

7)      Shop around. Rates vary from company to company. It is important to work with an independent broker who can objectively shop around for you to ensure you are finding the right policy for you at the best price.

For more information about disability insurance or to request a quote, contact Set for Life Insurance today!

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