You selected private disability insurance and have not thought much about it since…until disability struck. Many folks wrongly assume that disability insurance coverage stay constant. The truth is many disability insurance coverages as well as premiums can change over time.
Three basic types of renewability disability coverages are available today. Choosing the right one guarantees that your rates will stay the same through the life of the policy.
Non-Cancellable and Guaranteed Renewable
Non-Cancellable and Guaranteed Renewable means that, after you place a policy in-force, the insurance company legally cannot change your premium schedule, monthly benefits, or policy benefits to age 65 or a certain age. If you are totally disabled and your income goes down later in life or you change occupations, the company will pay you the total disability benefit you originally placed in-force. This is the best type of policy.
In this case, an insurance company can change anything about the policy, including the premium by state, policy year, or occupational class, with approval by the state. Almost every insurance carrier that offers a guaranteed renewable contract used to offer a non-cancellable and guaranteed renewable contract.
The worst option of the three, this type of policy offers no guarantees. Conditions for you to renew your insurance every year tends to vary from one company to another, and you can be sure that the conditions will be hard to meet at the worst possible time.