What to Expect When Applying for Disability Insurance? (Supreme 2022 Guide)

— Last Updated May 27, 2022

What to Expect When Applying for Disability Insurance? (Supreme 2022 Guide)

In this article

— Last Updated May 27, 2022

Read Time
8 mins
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Reviewed by
Eric Berkman
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What to Expect When Applying for Disability Insurance? (Supreme 2022 Guide)

Stephanie Wilson

Director of Operations

Read Time

8 mins
Group-27.png

Reviewed by

Eric Berkman

In this article

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.

disability insurance

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.

What Long-Term Disability Insurance Covers:

While short-term disability is designed to help you get through brief rough patches of a few months, long-term disability is meant to help you for anywhere from a couple of years to the day you reach retirement age.

This means that the disabilities it will cover are quite different.

For the basics, make sure your disability policy terms include the following conditions ((3)).

Pulmonary Issues:

Even if you don’t smoke or do other harmful things to your lungs, many things can cause you to develop pulmonary issues. These are things such as COPD, chronic bronchitis, and various other lung conditions that impact your ability to breathe. Once you develop these things to a disabling degree, they are usually life-long, and they do warrant a long-term disability claim.

Serious Injuries:

Sprains and breaks won’t be covered by your long-term disability insurance policy, and you shouldn’t expect that. However, consider the possibility of you losing your legs in an accident, becoming paralyzed, or suffering another life-long injury that prevents you from working again. You should expect to find this covered in the terms of your policy.

Cancer:

Cancer can happen to anyone, and it’s one of the biggest issues people commonly face. The vast majority of long-term disability policies will cover this, and if the one you’re looking at doesn’t, you should take another route.

Heart Conditions, Strokes:

Heart attacks, strokes, heart failure, and various similar conditions are necessary to protect against, and luckily, any worthwhile insurance policy will cover them.

Mental Health:

You don’t have to be born with a mental illness for it to be a serious concern. Trauma, brain damage, and other things can cause a mental illness to develop when you’re older. You also may have a pre-existing mental illness that gets more serious and suddenly prevents you from working.

Long-Term Expectations and What to Prepare for

Now that you know what to expect when going over policies and applying, you should put some thought into what might pop up later and how you can prepare for that, now.

applying for disability insurance

Know Your Elimination Period:

The elimination period is the waiting period your insurer will put you through if you do buy the policy and end up making a claim.

This elimination period is essentially when they’re trying to find a reason to deny your benefits. So, it’s important to find out what the expected period length is in the terms of the policy and how that company handles elimination periods before you purchase a policy through them.

Keep Your Medical Care and Records Up-to-Date and Check the Sign-Up Terms:

Just like you will need your medical records and health history available during the application process, you’ll need it again if you ever make a claim.

In fact, many insurance companies use clever wording in sign-up contracts to make you slip up and leave out information, omit certain medical files, and other little mistakes specifically so they can use that against you when you try to claim your benefits.

Expect the policy terms and sign-up paperwork to have odd, evasive questions, confusing sections, and more information than you’re likely to take in from a single reading.

If there are things you don’t understand, consult someone such as Policy Solver. Also, keep your medical records, and continuously update them over the years.

They Try to Deny You:

During your first meeting, your insurance agent will try to make the experience smooth, calm, and positive. Don’t be fooled. Insurance companies are businesses. They start looking for ways to deny claims as early as when you sign up to maximize their profits ((4)).

Keep this in mind, understand the business side of it, and cover every possible bit of information you can to prevent this from being used against you in the future.

Expect Stress, but Don’t Settle for it

As you can see, you should expect a stressful experience with plenty of paperwork. If you mess up the process, it can bite you in the rear later on.

Luckily, you don’t have to worry about that with one final precaution; get Policy Solver to help.

Policy Solver has a massive network of insurers with various types of policies to ensure you can find one that suits all of your needs. However, the biggest benefit is that they take the stress out of purchasing insurance. You’ll sit down with a trained insurance consultant who will assess your needs and pair you with a policy that meets them, and then they’ll help with the application process to ensure you don’t make the costly mistakes many other policyholders do.

Sources:

1: Taken from Policy Genius, 03/07/2022, https://www.policygenius.com/disability-insurance/how-to-get-disability-insurance/

2: Taken from Meet Breeze, 03/07/2022, https://www.meetbreeze.com/disability-insurance/how-much-does-disability-insurance-cost/

3:  Taken from Newsweek, 03/07/2022, https://www.newsweek.com/amplify/everything-you-need-know-about-long-term-disability-insurance

4: Taken from DI Law Group, 03/07/2022, https://www.dilawgroup.com/blog/2014/07/disability-company-delays-and-denials/

 

March 11, 2022

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