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HOW TO APPLY FOR
DISABILITY INSURANCE
Applying for group coverage
For group coverage through work, your employer (or union) enrolls you. Usually
there are no medical questionnaires to complete if you work for a large company.
But if it's a smaller organization, you could be asked to provide medical information or undergo a physical exam. Depending on the outcome of this evaluation, you
could be offered or refused coverage for medical reasons. (Employees of a large
organization may not have to answer medical questionnaires because, with a large
group, the risk is spread over a greater number of people. But with a small group,
the insurance company assesses each applicant, since the risk cannot be spread
over as many individuals.) The need for medical information may also be required
for certain benefit amounts.
Applying for individual coverage
For an individual plan, the process is more involved as your application for a policy
must first be evaluated by the insurance company. Your insurance agent completes
a form with details on your health, job, earnings and hobbies. You may also be
asked to undergo a physical exam or provide other medical or financial information.
Many people applying for individual disability insurance benefits are issued policies.
A small per cent of applicants are rejected. Some applicants receive the coverage,
but with exclusions, higher rates, or no increase in rates but with smaller benefits,
occupational ratings for hazardous work, longer waiting periods or shorter benefit
payment periods.
TIP: There are rules for the amount of time you have to apply for disability insurance
once it is offered. Be sure you understand what those time limits are and what the
implications will be if you decide to decline insurance coverage, and then wish to join
the plan sometime later.
TIP: Even if you have medical problems, don't assume you cannot be insured. Consult
your insurance agent, especially if you've been healthy for several years. Be aware
that it's possible to be accepted for life insurance but declined for disability insurance.
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