PROCESS OF OBTAINING INDIVIDUAL DISABILITY INSURANCE

Step 1.    Get Help

Find a qualified insurance broker that you trust.  He/She will help you navigate the many different options available.  The benefit of working with a broker, rather than an agent, is that brokers will typically be able to compare the different policies from multiple companies.  Sometimes, insurance agents will feel an obligation to sell products from the company they work for.  That is usually not the case when working with an independent broker.

Step 2.    The Application Process

Disability insurance is not as simple as, "I want it, I'll buy it".  It can be very difficult to qualify for, and simply applying for a policy does not guarantee that you will receive one.  Before an application is submitted to an insurance company, ask your broker to properly pre-screen any preexisting conditions you may have.  This can help to avoid the possibility of  being declined, which raises red flags when applying for future coverage.  The applications will be different based on the chosen company.  Here is what an application typically includes:

      • Personal information - contact information, home address, etc.
      • Type and amount of insurance being applied for
      • General information regarding your occupation, dangerous hobbies, etc.
      • Medical history - any illness, injury, disorder, treatment, etc.
      • Finances - current and past annual income, etc.

Step 3.    The Exam

A paramedical exam consisting of any combination of the following:

      • Medical history questions
      • Height, weight, blood pressure, pulse, etc.
      • Urine specimen
      • Blood specimen
      • EKG

Typically, an exam for individual disability insurance consists of everything other than an EKG.

Step 4.    The Underwriting Process

All of the previous information is sent to the insurance underwriter.  The underwriter will review all of the information provided and order medical records if necessary.  During this process, it is not uncommon for the underwriter to request additional information from the applicant.  If this happens, your insurance broker will contact you to secure the additional information.  At the end of this process, the underwriter will determine the amount of risk involved to insure you.

Step 5.    Your Policy Is Issued (hopefully...)

Once the underwriter has determined your risk, he/she will either issue you a policy as you applied for, issue you a policy with modifications/exclusions, or you may be declined for coverage.  The most common reason for being declined is due to preexisting health conditions.  The risk of being declined can be minimized with proper pre-screening of all preexisting conditions prior to submitting an application.  Remember, it is imperative to obtain a policy while you are young and healthy!