How to Compare Disability Insurance

Not all disability insurance plans are created equal.  This means that both employers and individuals who need to secure this type of coverage on their own must do some comparison shopping.  By looking closely at the range and amount of benefits as well as the cost, it is possible to lock in the best possible disability benefits without wreaking havoc with the budget.

Whether purchasing disability insurance for as part of the group benefits for employees or a stand-alone policy for an individual, there is a need to compare the provisions associated with several different plans before making a final decision.  Typically, this means looking at the overall range of benefits provided, any deductibles that may apply, and what types of rights and responsibilities the covered party has in regards to the policy itself. 

• Identify the type of benefits provided in the disability insurance.  Here, the focus is on identifying what types of events are covered under the terms of the policy.  Make sure the coverage is relevant to the type of work and general activities of those who will participate in the plan.  Nothing could be worse than paying for disability coverage only to find that an event leading to disability is not covered by that plan.


• Determine the scope of coverage associated with every event.  Make sure you understand how much coverage is provided for each of those covered events.  Ideally, you want the benefits to provide long-term support to anyone who is permanently disabled.  Keep in mind that the amount of coverage for different events may vary, so comparing this point among several different plans is crucial.


• Find out what covered parties must do in order to claim those benefits.  This includes what type of medical examinations must occur before the provider is satisfied the claim is legitimate, who can file the claim in terms of physicians, family members or even the covered party personally, and what type of responsibilities in terms of ongoing communication with the insurance company are required.  Keep in mind some policies have very straightforward and precise procedures for this type of activity.


• Consider the cost.  As with any type of insurance plan, cost is an important factor.  Ideally, the premiums for the disability coverage should fit well into the budget while still offering the best possible range and amount of benefits to the insured parties. 


• Make sure the insurance provider can operate in your jurisdiction.  In an age when many insurance providers offer plans via online applications, it is important to check with state or provincial governments to make sure the provider can in fact sell policies in the jurisdiction.  Knowing the company can operate in your area will go a long way toward making sure its practices are in compliance with current regulations and that the plan will be honored in the event you should ever need the coverage.