The disability income (DI) marketplace has undergone some major transformations in the past 20 years. Luckily, newer DI policies are far superior to their older counterparts. Read on to learn about how these policies have changed for the better in recent years.
A quick history lesson
The disability income marketplace was forced to make major changes in the 1990’s, when there was a surge in fraudulent policy claims. Many critics blamed the rampant fraud on the policies’ loose definitions, lenient requirements and under-priced premiums. In response, U.S. insurance carriers tightened up by reducing limits and benefit amounts.
Today’s typical DI coverage
Today, the most common type of DI coverage is group long-term disability insurance. Although many U.S. employers offer their workers this coverage, these policies have quite a few downfalls.
Covered workers must meet strict requirements before they can receive benefits. Additionally, monthly benefits typically cover 60% of a worker’s salary and are generally capped at $10,000 to $15,000 a month. This means that many workers, specifically those with higher salaries, don’t receive nearly enough benefits to cover their expenses.
New advances
The DI marketplace is finally making some advances. Insurers are now offering new and improved DI policies that include riders and other attractive benefits.
- More coverage: Some insurers are offering higher coverage limits.
- Longer benefit periods: A new innovation is the graded lifetime benefit.
- Own-occupation riders: This rider is particularly valuable for doctors, other medical professionals and attorneys.
- Catastrophic insurance rider: This benefit can provide additional monthly income for necessary equipment, nursing or minor home improvements.
- Retirement protection: This benefit provides continued retirement contributions if the insured becomes disabled.
With all of these new advances and benefits, it’s clear that the DI marketplace has come a long way. If it’s been a while since you last reviewed your existing DI coverage or if you have no coverage currently, give us a call to learn more.