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About three years ago, when we bought our home, it occurred to me that we were putting ourselves at a bit at risk. I am the primary breadwinner, and we hadn’t made provisions for what could happen if I could no longer work. Buying the house really made me think about whether or not my family was truly protected. We had add a bigger term life insurance policy to reflect the obligation of owning a home, but life insurance wouldn’t help if something happened to my hands or arms and I could no longer type.

So I decided to buy a disability insurance policy. The policy is not terribly expensive, and it covers loss of income due to a number of issues. It has provided a great deal of peace of mind — especially for my husband, who worries every time I go camping that some catastrophe will occur to limit my ability to do my work. You might need disability insurance as well.

If you are concerned about what could happen to limit your ability to work, consider a disability policy. This can help ensure that the unexpected doesn’t cripple your financial situation as well as affecting your body.

What to Look for in Disability Policies

Like all insurance, it is important to consider your needs, and then look for a policy that provides you with the coverage you require. It is important to be on the look out for fine print and other terms that could affect your ability to receive coverage. Here are some things to be on the look out for:

1. Your premium: Many disability policies allow you to lock in your premium. You can get either a non-cancelable policy or a guaranteed renewal policy. There is a difference. The non-cancelable policy means that your premiums and coverage can’t be changed — as long as you pay your premiums. A guaranteed renewal policy, on the other hand, allows you to renew without changing coverage, but the premium can go up.
2. Changes to your coverage: There are also conditionally renewable disability insurance policies that can change the terms of your coverage, and may not even allow you to renew. These also allow insurers to raise your coverage rates at any time — even if the policy isn’t up for renewal.
3. Definition of “disability”: Another consideration when choosing a disability policy is the definition the company uses for disability. Some policies will pay out if you can’t do your current occupation, even if you can work otherwise. Some policies will only pay out if you can’t do any work at all. There are also pay out rules based on making up the difference in income if you have to do a different job due to your disability.
4. Collection time period: Make sure you understand the collection time period. Some policies will allow you to start collecting as early as 30 days after the disability is in effect. However, you may have to pay more. Other insurance companies will require that you wait 720 days — that’s almost two years! It is a good idea to choose something in the range of 90 to 120 days to begin collecting your benefits.

In the end, you need to be careful and evaluate your needs. Figure out how much you would need to replace your income, and consider getting that amount of coverage. Other considerations can include whether or not your partner has an income, how close you are to receiving government and other retirement benefits, whether or not you are eligible for Social Security disability benefits, and other sources of help. And, of course, before you sign on the dotted line, make sure you understand the restrictions related to your disability policy.