Texas Disability Insurance for Individuals & Corporations

The following are several points to consider when reviewing various individual disability insurance rate comparison quotes:

What are the chances you'll need short term disability insurance or long term disability insurance coverage:

• In the last 10 minutes, 490 Americans became disabled.
  - National Safety Council®, Injury Facts® 2010 Ed.
• In 2008, there were 2.1 million disabling injuries caused by a motor vehicle accident; compare this to 39,000 fatal motor vehicle accidents. 
  - National Safety Council®, Injury Facts® 2010 Ed.
• In the US, a disabling injury occurs every second, while a fatal injury occurs every 4 minutes.
  - National Safety Council®, Injury Facts® 2010 Ed.
• In 2007, the employment rate of working-age people with disabilities in the US was 36.9%.
  - U.S. Census Bureau, American Community Survey, 2007
• 62 percent of all personal bankruptcies filed in the U.S. in 2007 were due to an inability to pay for medical expenses.
  - June 4, 2009. The American Journal of Medicine
• A Council for Disability Awareness (CDA) survey of workers found:
• 90 percent underestimate their own chances of becoming disabled.
• 85 percent express little or no concern that they might suffer a disability lasting three months or longer.
• 56 percent do not realize that the chances of becoming disabled have risen over the past five years.
  - Council for Disability Awareness, 2007 Disability Awareness Survey

Rather than purchasing a Disability Insurance Policy, many people believe they can rely on Social Security and/or Workers Compensation for protection. Unfortunately, Workers Compensation will only cover a "job related" injury or illness and both Workers Compensation and Social Security benefits are often inadequate.

Comparing short term disability insurance and
long term disability income insurance plans:

Find out how a policy defines a disability. Own-occupation will provide a benefit if you are unable to perform the duties of your "own occupation" (your current field of work). Any-occupation is a lower priced plan but to receive benefits you must be unable to work at any job.

See what the Waiting Period options are. Usually the longer the waiting period, the lower the premiums. However, you will need an emergency fund, sick leave benefits etc. to support yourself during this period.

How long are benefits received? Two to five years will probably not be sufficient. If affordable, select an option that pays to age 65. You will then have income from social security.

Ask about Residual Benefits. Will you receive reduced benefits if you are only able to work part-time?

Look to see if the plan proposes a guaranteed renewable or non-cancelable policy? If non-cancelable, your premiums will not go up, however there will almost certainly be an additional cost to have this type of guarantee.

Can additional coverage be purchased at a future date regardless of your health?

A cost of living rider will assist benefit payments (after you become disabled) in keeping pace with inflation.

Can benefit payments be coordinated with benefits received from Social Security. This Social Security rider could save you money.

Waiver of Premium, an option with many plans, would allow you to quit paying premiums once you are disabled. This could be very important to you.

Make sure the company you are considering doing business with is Financially Sound (your broker can assist you with this). You don't want to be looking for another policy later in life (when you are older and possibly not as healthy) because the company had financial setbacks.

A Nutshell Look at Disability

The most important definition in the contract is the "definition" of disability.  As an insured you want this to be simple and easy to understand. 

If a reasonable person (you) cannot easily understand this definition and how/when benefits are to be paid then the plan should probably not be purchased.

If the definition appears ambiguous to you then it will be subject to interpretation by the insurance company at claim time. It's important to realize that the more ambiguous the Definition of Disability, the lower the premium.

A definition that favors the insured costs more money than one that gives the insurance company an out.

The next critical part of the plan is partial/residual and recovery. Partial means that you don't ever have to be totally disabled to collect benefits.

This is included in some contracts and it is an extra rider in others. Residual means the plan will pay you a benefit for a partial disability. When partially disabled a good contract internally indexes your prior earnings so that your residual benefits can keep pace with inflation (not the same as the COLA Rider).

The Recovery feature is how long benefits will be paid when you are back at work full time (and still have an income loss) after being disabled.

The Cost of Living Rider (COLA) increases the Total Disability Benefits after one year of Disability. It provides automatic increases in benefit to compensate for the cost of inflation. 

All plans shown are "Non-Cancelable and Guaranteed Renewable to Age 65" - this means the insurance company cannot cancel you (except for non-payment of premium) and they must offer renewal to Age 65.

Premiums are guaranteed to stay level to 65 unless otherwise noted as step Rate, which is level for the initial period and then "Steps Up" to a guaranteed level premium to age 65. All plans waive premiums during Disability.

The HCI Advantage
A strong benefits package helps you recruit and retain valuable employees. We help our clients tailor a program that will fulfill both the employers' and employees' needs. Please call HCI at 713-626-2838 or use our Contact Form.

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