You know that disability insurance is necessary, or you wouldn’t be reading this. It protects you from those unavoidable life events that send your entire way of life spiraling downward in an instant. However, it’s not as simple as just contacting an insurance company, handing over some cash, and getting a policy.

In fact, it can be extremely stressful.

You can help reduce how stressful the process is by understanding what to expect and how to prepare yourself before making contact with an insurance agent, though.

In this guide, you’ll learn about the different things you should expect when applying for disability insurance and a few tips to make the process a bit easier.

Of course, you can streamline the process even more by simply contacting a consultant such as Policy Solver to walk you through the application process.

Basic Prep Work

Before you even try communicating with an insurer, you need to do some prep work. This aligns with the first thing you should expect: Questions, and lots of them.

An insurance provider promises you coverage for highly expensive services in the event that you meet the requirements of a claim. With disability insurance, especially long-term disability insurance, you can end up receiving that coverage for decades; depending on when you become disabled and how far away from age 65 you are.

As such, disability insurance companies tend to outline extremely specific requirements, and they want as much information from you as possible to ensure that they can set their premium rates and coverage amounts up in a way that benefits them.

Dealing with all of this can be extremely stressful if you don’t know what records and paperwork they’re going to ask for. So, it’s best to scrounge up at least the following documents BEFORE contacting the insurance provider you hope to enroll in a policy with.

• Legal, valid identification.
• Birth certificate.
• Social Security Number.
• Medical records.
• Any worker’s compensation records you may have if you are already receiving benefits from that.

Those are the basics, but certain insurance providers may request further information such as proof of address and various other basic forms.

However, you also need to be prepared for the questions they’re going to ask you and the assessments they’re going to make. Answering these questions on the fly can be stressful and lead to mistakes that cause you to pay higher premiums, or you might omit something that invalidates a claim later on ((1)).

Job Riskiness:

The type of job you have matters a lot to disability insurance providers. Someone who works in an office setting filling out paperwork or taking calls is a lot less likely to need their disability insurance than someone who is an ice trucker or oil rig specialist for obvious reasons.

Your job’s risk factor increases or decreases your chances of making a claim, and that can affect your premiums.

Be ready to tell them what type of position you work in, what you do on a daily basis, and any potential hazards you may face in the workplace. They’ll know some of this information just from your job title, but it’s best to be as transparent as possible.

Financial State:

Oftentimes, policies are designed to not start their benefits until you’ve exhausted every reasonable personal resource. This means paid time off at your job, worker’s compensation, and sometimes, even asset liquidation, but you typically don’t need to worry about that last one.

For this reason, you’re expected to provide a full rundown of what you have, how much you’re paid, the structure of your employment benefits, and more.

Potential Risks:

Your age, medical history, pre-existing health conditions that are either mental or physical, and any financial liabilities you may have are all things a disability insurance company are going to want to know about to calculate how much of a risk it is taking you on and how much they need to charge to keep from making the transaction a complete loss.

Take time before your meeting with a representative to think about these things and preferably rehearse your answers. The more accurate and detailed you are, the less you’ll have to worry about stress later.

Price Expectations

The price of disability insurance, whether you’re getting a short-term or long-term policy, is fairly standard across the industry. You should expect to pay between 1% and 3% of your gross annual income ((2)).

It’s a good idea to do your own math and calculate a figure that meets this price range expectation. Even if you aren’t the most preferable policyholder for the insurer, your rates shouldn’t skyrocket to 7% or more for a single policy. Knowing how much you should expect to pay will prevent you from accepting a poor-quality deal that is simply too much.

You Buy it Separately

As mentioned previously, disability insurance policies come in two varieties: short-term and long-term.

However, these policy types aren’t bundled together under one policy. You have to buy them separately; even if they come from the same insurer.

That means that you can get a short-term policy from one insurer and a long-term policy from another, just purchase a long-term policy for very serious, long-term disabilities, or buy each policy from one insurer you really enjoy working with. However, it also means that the 1% to 3% cost is for each policy. If you purchase both for full coverage in nearly every situation, and you get policies towards the 3% end of the spectrum, that’s a total of 6% of your gross annual income.

 

What Disabilities Will Be Covered?

Disability insurance also isn’t something that functions as a one-size-fits-all situation. Each policy type will cover your income in the event you suffer from a pre-determined disability. If you develop a disability that isn’t part of the terms of your policy, you won’t be protected.

Every policy will have unique additions or unfortunate omissions from its list of covered conditions, but there are some standard entries across the industry.

Here are the ones you should reasonably expect your insurer to cover, and definitely take a look at the policy to ensure all of these, and preferably any you’re worried about, are covered by your policy. If you go into it expecting it to just cover anything that may happen, you may end up getting a policy that doesn’t cover some of the most common issues you’re likely to face.

Short-Term Disability Insurance Covers:

Here are the common disabilities covered by short-term disability.

Injuries:

Sprains, broken bones, and similar injuries that can occur anytime and anyplace may qualify you for a short-term disability claim if they can be proven to prevent you from returning to work for 3-6 months.

Severe Illness:

The common cold and similar things aren’t going to be covered, but long-lasting Covid-19 and other illnesses that can keep you from working for months are covered by most short-term policies.

Surgical Recovery:

If you need to have a surgery that will require months of intense recovery, such as a transplant, valve replacement, or similar things that take much longer than a week to get over, your disability insurance can protect your income. This is a key feature to look for.

Pregnancy and Pregnancy Complications:

If you get pregnant and cannot reasonably perform your work tasks without endangering yourself or the baby, disability insurance can give you the time you need to focus on your pregnancy. Obviously, this will be a feature some people will care about more than others.

Pregnancy complications such as post-partum depression, healing from major tears, or taking time to recover from other complications are also covered.

Mental Health Issues:

Certain events can trigger or create mental illnesses that, while they typically don’t prevent you from working, may impact you heavily for a short time. For example, if you suffer from PTSD, something triggers your PTSD very badly, and you simply cannot function without a few months of therapy and a recovery period, you may qualify for a disability claim while you focus on your mental health.