Are all disability insurance discounts created equal?

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Individual disability insurance can be very expensive. Depending on your age, gender and occupation, rates vary from 2-4% of your adjusted gross income.

One of the best ways to reduce the cost when you purchase individual disability insurance is to look for discounts. These discounts vary greatly and it is important to find out which kind of discount you are getting on your policy. Not all discounts are created equal.

Additionally, discounts are not available through all agents and brokers. For instance, Set for Life has set up discounts at hospitals and employers around the country and as a result, they are available for people who purchase and submit their applications through Set for Life.

Discounts fall into several categories:

  • ·        Association Discount
  • ·        Resident and Student Discount
  • ·        Employer Sponsored Discount
  • ·        Unisex Rate Discount

Association Discount
Association discounts are typically available to members of an association when purchasing an individual policy. Some examples are the American Medical Association AMA, American Bar Association or the California Veterinary Association.  If an association discount is available and your agent/broker has access, you will receive a discount on your policy. These discounts range from 10-15% depending on the insurance company.

Resident and Student Discount
Some companies offer a resident and student discount on their policies. These are available to medical residents, medical fellows, dental students, dental fellows, CRNA students, and dental and medical students. These discounts are typically 10% on the original policy.  Although the discount is permanent on the initial policy purchased, they will not apply to future increases when you no longer have the resident or student status. Be sure to ask your agent/broker if the discount will apply to future increases as this may come as a surprise down the road when you elect to increase your policy and the cost is greater.

Employer Sponsored Discount
Employer sponsored discounts are typically available for people who work for a particular employer when they purchase their policy. The discounts range from 10-15% depending on the insurance company. If the rates are also unisex, they will usually be 15% for men and 55% for women. Depending on the company, the discount may or may not apply to future increases if you are no longer at that same place of employment. Be sure to ask your agent/broker if the discount will carry forward on future purchases if you are no longer employed at the discounted employer.

Unisex Rates
Unisex rates are rates that do not distinguish between male and female rates. For women, this can reduce rates by at least 40%. For men, it typically does not reduce their rates unless it is accompanied by  employer sponsored discounts. With the employer sponsored discounts on top of the unisex rates, men will save about 15% and women 55%. Depending on the company, the discount may or may not apply to future increases if you are no longer at that same place of employment. The best type of discounts are the ones that are permanent and apply to all future increases regardless of place of employment at the time of increase. Be sure to ask your agent/broker if the discount will carry forward on future purchases if you are no longer employed at the discounted employer.

Set for Life Insurance is proud to carry the largest portfolio of disability insurance discounts in the country. For more information about disability insurance discounts or to request a quote, please contact Set for Life Insurance today!

 

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