Individual disability insurance is truly a basic concept. It is an insurance product designed to replace anywhere from 45-60% of your gross income on a tax-free basis should a sickness or illness prevent you from earning an income in your occupation. Every disability insurance policy from every insurance company is very different; this is not a product to simply shop for the most competitive rate. To buy the cheapest disability insurance policy on the market is to throw money away. The odds of getting paid a monthly benefit under a cheap contract may be significantly lower than receiving benefits from a quality contract.

If you don’t know what the chances are of becoming disabled by now, you probably just passed your life and health test yesterday. You need to understand that the need for disability insurance increases every day. Unfortunately, most of the statistics come from the 1980 CSO table, which was the last time anybody did any real research on the need for disability insurance. One of the reasons disability insurance carriers went out of business in the ’80s was not just the medical DI marketplace, but the increase in morbidity because of things like “airbags,” “advances in cancer treatment,” “mobile defibrillators,” etc.

The fact is, as our culture becomes more advanced, people are living through events that used to kill them. As a result, the need for disability insurance is significantly higher. Once you believe that disability insurance is a necessary part of someone’s financial plan, you need to understand its policy.

There are several websites you can visit to study the actual makeup of a disability insurance policy. You can find a specimen policy and explanation of the policies to its real world terms what each section of that policy means. You will understand also why you may prefer a pure own-occupation policy to a modified own-occupation contract or why an elimination period that requires consecutive days of disability is almost worthless.

It is best to meet with a few agents to compare policies and quotes and don’t be afraid to ask a lot of questions. If you are working with an agent who does not answer your questions to your understanding, it is best to find an agent who is willing to take the time to help you understand the policy in-depth. Like any insurance policy, disability income insurance has many different coverage’s that need to be understood and it is especially important that you know what you are getting and when, since this will be the income you and your family may be depending on in the future.