How to make disability insurance affordable


Q. I don’t have a lot of money left over after paying bills each month. I know I should buy disability insurance – I work in commercial fishing and my job gives me some short-term disability but I think I need more. How can I make the disability insurance more affordable without losing the benefits I could need?
— Trying to do right

A. Good for you that you recognize the need to protect your most valuable asset – your ability to earn income.

And if you think paying your bills is tough now, just imagine how much tougher it would be with no income.

That’s why disability insurance is such a great investment.

You said your company gives you some short-term benefits. Typically that will last six months max, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

You’re smart to consider what would happen if your disability was serious and you were either permanently disabled or had a longer disability. You would need more.

Gaelick said a long-term disability plan would pick up where the short-term benefits end.

Making disability policies more affordable will depend on your specific situation.

“Premiums are completely dependent on age, gender, occupation, smoking status, health, benefits chosen, how long you wait before benefits kick in, how long benefits are paid, whether you have chosen any options and the insurance carrier,” Gaelick said.

There are some variables you can’t change, such as your age, but you can control other parts of the policy, such as how much of a benefit you purchase.

“There may be a maximum benefit you can qualify for based on your income but you can certainly take less,” Gaelick said.

You’ll also look at different options for the policy, and you can make choices here.

For example, you can wait longer before benefits kick in. If you indeed have short-term benefits for six months, you can save by going with a six-month elimination period, Gaelick said.

Ideally you should get as much benefits as you can, he said, but if there are budgetary constraints, something is better than nothing.

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