Professionals should seriously consider this option when purchasing a Disability Policy It is surprisingly low cost. In fact it is the least expensive and an important rider to have. Insured's traditionally exercise this rider a few years after the originally policy is issued.Comments
New England Disability and Life | Blog
After you purchase a disability policy there is always a risk that your health will change and you will NOT be able to buy more coverage.
With the FIO rider there are NO HEALTH QUESTIONS just financial. So this rider insures your health and allows you to increase your coverage!Comments
A very good and valuable option that everyone should purchase when buying a disability policy is the Future Increase Option (FIO).
This rider allows the insured to purchase additional coverage in the future, with just proof of income. This is a very good deal as the application is VERY short and approval is virtually guaranteed if your income is higher.
Disability benefits provided at work cover 60% of your income but the benefits are reduced by taxes.
Since they are taxable you have the ability to purchase disability insurance for the amount lost to taxation.
Example, you have a policy through work that pays $2,000 per month. After taxes of 25% you receive $1,500. You can purchase a policy for the $500 per month lost to taxes.
In addition, some employer benefits have a cap at 50% so you can make up that 10% difference as well.
A disability claim can be a frightening event. However, the insurance companies make the claims process a smooth one, even though it could take several months to process.
Some claims are obvious. If you are in a hospital, unable to work at all, the claim takes less time.
Some claims are not obvious. Two types of claims that are harder to prove are Anxiety/depression and Back claims. Both are harder to prove and the claims department must be sure that all claims are legitimate.
If an insured answered all question on an application honestly and thoroughly they have nothing to worry about so remember the age old saying: "Honesty is the best policy."Comments