Disability Insurance Requirements

Disability Insurance Requirements: What Are the Requirements?

Although there are no set requirements for qualifying to purchase disability insurance, collecting upon the insurance does require you to present certain facts before they pay any benefits. Some of those requirements are the same across the board, and others may vary depending upon the insurance carrier and the policy that is in force at the time of the disability. Individual policies may differ on some issues such as waiting period and maximum time that benefits can be paid, but most policies will be the same from insurance carrier to insurance carrier in regards to eligibility requirements and conditions that are covered. Of course, knowing all of the requirements before you purchase a policy will save any problems down the road. Even if your policy is employer-sponsored and paid, make it a point to read the policy so that you know if you need to purchase a supplemental policy to cover any gaps in coverage.

Purchasing Disability Insurance

Unlike life insurance, disability insurance does not customarily require a physical examination nor does it disqualify a person because of their health. The premium, however, is based upon several factors that include the age of the insured, the amount of distribution, the waiting period, the maximum benefit term, and sometimes gender. Other factors may also come into play including whether the insured smokes and whether they have a history of illnesses that are likely to cause them to be disabled again and on a more regular basis than the industry average. With employer-paid policies, you do not usually know about the rating factors since rates are shared equally with everyone regardless of individual experience. However, when you purchase your own, you will definitely find that smoking is a contributing factor as well as any other illnesses you have had or any conditions you may currently have, the latter of which may or may not be covered by the policy. In most cases, there is no pre-existing clause under disability insurance, but you will pay a higher premium contingent upon the insurance carrier’s premise of your potential to collect benefits because of the condition.

Understanding the Disability Insurance Requirements

The most important disability insurance requirement is that you must be unable to work due to accident or illness, and you must meet the required waiting period in order to be eligible to collect benefits. The waiting period can be anywhere from 0-14 days for short-term disability, and up to several months for long-term disability, but this should be defined for you at the time you sign up for the coverage. Be sure to take the time to read the policy carefully so that there will be no doubt about the disability insurance requirements when you need them.

Filing for Benefits

For most insurance companies, in order to file for benefits, you need to first meet the initial requirements of being out of work due to accident or illness and meeting the waiting period requirements. Once you have met the initial requirements, the next step is to file your claim. In most cases, the insurance company will need a form that is signed and filled out by you, your employer, and your doctor. Make certain you follow all the instructions because failing to provide all necessary information will delay your claim. If you are self-employed, you will want to find out if the insurance company wants you to fill out the section for employer and patient or if they have a separate form for those who are self-employed.