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When purchasing disability income insurance, it is important to recognize the factors that will play a part in determining your premium. Items like your age, gender, and occupation can all impact the premium as well as any options or additional benefits you add to the policy. Below are some Consumer Tips and additional information for you to consider when looking at a disability policy:

Cost Considerations, Options and Features

There are a number of factors that determine the cost of an individual policy, including:

• Age - a younger person will usually pay less each year than those who are older. Most companies do not issue policies for anyone over age 60.
• Benefit Amount - The more income that will be replaced, the higher the premium. For instance, replacing a $1,000 a month income would cost less then replacing $1,500 of monthly income.
• Benefit Period - how long you want to receive benefits also plays into determining premium. Policies with a specified benefit period, such as 2 years, is going to cost less then a policy that pays until age 65 or "Normal Retirement Age."
• Health Status - Your health, at the time you submit an application, will be factored into your insurance premium. If you are healthy, your rate will be better than someone who is not as healthy.
• Definition of Disability - how a policy defines disability will also vary the premium. Policies that pay you if you are unable to perform "your own occupation" will cost more than a policy that pays for "any occupation".
• Elimination Period - An elimination period is also sometimes referred to as the "deductible" of a disability policy. This is the period of time you are disabled before the policy begins to pay benefits. The longer you wait, the lower your premium.
• Smoking Status/Tobacco Use - Most companies either give a discount to non-tobacco users or add a surcharge to the premium for tobacco users.
• Type of Job - The type of job you perform can also impact the cost of your insurance. Someone who works in an office is going to pay a lower premium then someone who drives a truck, for instance.

The options and features of a policy can have a dramatic impact on the cost of your disability insurance policy. There are often several options available to add as well as different features to review in each type of contract you consider. Some of these options and features are:

• Amount of Benefits - Most insurance companies "cap" the amount of pre-disability earnings you are allowed to purchase; usually 70% to 80% of pre-disability income. The monthly amount you purchase is based upon your stable, reliable income at the time you purchase the policy.
• Definition of Disability - As described above, policies can differ based upon whether you are insured for your "own" occupation or "any" occupation or a combination of both. Be sure you know and understand under what circumstances the policy you purchase will pay benefits.
• Extent of Disability - Some policies requires that you be totally disabled before payments begin. Partial disability can be covered; usually for a limited time, sometimes only if followed by total disability.
• Return of Premium - Some companies offer a return of premium rider that will return your premium at age 65 less any benefits received.

Consumer Tips

• Work with an insurance professional that can help you assess your needs and offer options for coverage.
• Take the time to make sure you fully understand any policy you are considering. You should be comfortable with the company, agent and product before purchasing anything.
• Review the copy of your application contained in your policy. Promptly notify your insurance agent of any errors or missing information.
• Review your policy periodically or when changes occur such as purchasing a home or having children.
• When you replace one policy with another you incur new costs and fees. Generally speaking, it's in your best interest to keep a policy you already have and add on to your insurance protection rather then replacing an existing policy.