Disability Insurance Carrier
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A disability insurance carrier is a company that sells disability insurance. One disability insurance carrier may not subscribe to the same rules as another disability insurance carrier and this has caused some controversy in the world of disability insurance. There are no strict regulations regarding what one disability insurance carrier can do or not do. Let’s take a closer look.
When it comes to individual long term disability insurance plans one disability insurance carrier may classify “own-occupation” in a different way than would another. This serves to upset a lot of people because consumers unknowingly assume that the “own-occupation” definition is the same across the board when in fact it is not. When going to sign the contract of any given disability insurance carrier many people are actually getting what is more correctly a “modified own-occupation policy” as opposed to the “own-occupation.” This is misleading to consumers and is not considered fair business practice.
Ten years ago a disability insurance carrier at one company did the same as the company across the street or down the block or on the opposite side of town. Today many carriers use the term “own-occupation” when it really is not the case. It may be close but “own-occupation” has one definition and if modified even slightly it becomes something all together different.
What used to be an “own-occupation” definition is now closer to an “income replacement” contract. Own-occupation originally meant that if a disability made it impossible for a person to perform their present work responsibilities the disability insurance carrier would pay out benefits even if the person could still gain employment in another field of work. Today the new modified version of “own-occupation” looks more like this’ “so long as you are not engaged in any other occupation.” This also only applies to a total disability and not a partial one.
When you go to a disability insurance carrier it is important to read through the policy from start to finish and to identify if the “own-occupation” is in place or if it is an altered version. Ask questions and never sign on the dotted line or anywhere else until you understand the contract to the greatest of your ability. Many insurance carriers assume that all consumers understand insurance terms when in actuality most people are in the dark about many aspects of the insurance world, which includes long-term disability benefits.
Insurance companies do not necessarily set out to deceive their policyholders but instead aim to find as many ways as possible to turn a profit. You can offset your worries by becoming an educated consumer who is knowledgeable about disability insurance and what it can do for you. The worst thing you can do is put off purchasing it by convincing yourself that nothing bad in terms of a disability will ever happen to you. Nobody can know that for sure, therefore nobody is ever completely safe from worrying about his or her financial status. Do not wait but instead speak to a disability insurance carrier as soon as possible to get some estimates and then make a decision.
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