Disability Insurance Policy Components

This feature is the amount that the policy will pay to you should you become disabled.

This will define how long benefits will be paid. It could be 5 years or until age 65. The length of benefits paid will be directly proportional to the cost of the policy.

There are two general types of disability definitions that you should be aware of.

1. Own Occupation, or "Own-Occ" which states that in order to be declared disabled you cannot perform your particular occupation. Typically this would be the best as your earning potential will be greatest with your career skills.
2. Any Occupation, "Any-Occ" which would stipulate that you are unable to perform any occupation.

This is an important part of any policy. Be sure you fully understand how disabled will be defined. As noted above, being unable to perform your present occupation is what you want.

This feature allows you to increase your policy amount in the future as your income grows without having to formally reapply.

This type of policy is guaranteed as renewable, as long as the premiums are paid, but the premiums can be raised for a class of policyholders through regulatory state approval.

Having this in your policy, which is typically offered as a rider, will factor inflation into your paid benefits. This should be seriously considered, as a monthly amount now will be quite different in value 20 years from now. Inflation riders are generally offered in two forms.

• Simple - the monthly benefit identified in the policy is applied to an inflation factor
• Compound - the inflation factor is applied each year to last year's amount.

Inflation effects your expenses in a compound fashion. This means that the only way to stay with inflationary forces is with a compound inflation rider.

This product would pay benefits up to age 65.

This type of policy will be guaranteed renewable, as long as the premiums are paid, and will have premiums that cannot be raised. It is often referred to as a, "Non-Can" policy.