The point of an application for all to see is reasonable. Let me get a link or at least the main pages you need to look at. (this should be done by early next week…I am out of the office this week)

Here is a question that may help you.

Lets say you were offered two jobs a different companies

Job A pays $100,000 no disability
If you are sick or injured for what ever period of time (could be as long as 20 years) …you get zero.

Job B. pays $95,000 full disability indexed to inflation up to 66% of current pay and if you are partially disabiled (can’t work your full 40 hrours per week or more) this benefits pays the difference. This coverage goes until age 65.

Which job would you take? Why?

If you can not take a 12 month unpaid vacation (or longer)and protecting your pay is important to you then consider getting covered. If you have a lot of rental income or lots of income from your investments and do not need to work then don’t worry about it.

I always tell people once you get disability insurance you may not need it. But if you don’t have it Murphy’s Law works overtime. One idea if you think nothing will happen, is get a ROP (a return of premium) rider. After say every eight years if no claim is made you get 50% your money back if no claims have been made. You do pay extra for this, but the cost of insurance if no claim has been made is much cheaper.

Why not post a link to the application form here in your article for anyone to read?

Not knowing the profit margins of an insurance company is fine, what I’m talking about is knowing the risk you are paying to protect against.

The insurance company knows your statistical chance of becoming disabled is, based on your application answers and the actuarial formula / computer models.

With that information you could ask yourself (for example) is it worth $350 this year to cover a 0.05% risk?

It would help further to know what risks you won’t get or need coverage for.

For example if your greatest risk is injury on the job then you might be paying $350 for a 0.02% risk of disability (since 0.03% is covered by worker’s comp insurance).

If the greatest risk in your demographic is a car accident, but you don’t drive you might be paying for insurance you don’t need, not to mention car accident disabilities are also covered by vehicle insurance.

If you have a family history of disease like cancer or diabetes you might be paying for coverage that will not be paid out because of post claim underwriting.

Since mortality actuarial tables are available you can use them to gleam some information on the risk of becoming disabled, as I believe they are highly correlated.

The CDC provides a nice reporting tool which filters by age, sex, race here:

http://webappa.cdc.gov/sasweb/ncipc/leadcaus10.html

Maybe insurance provides the best risk reduction dollars to dollar, but maybe spending money on a chiropractor, a gym membership, an ergonomic chair or even a safer car would reduce your risk more efficiently.

If insurance agent’s have their client’s health in their best interest, maybe they would offer risk information to help people reduce their risks voluntarily, like telling them just how risky a speeding is, and how much it would save their insurance premiums to stop.

The key is to be truthful and the insurance company generally will make and offer. The more stuff you do, like sky diving the more the insurance company will exlude. For example if you have alot of speeding tickets sky dive and bungee dive the insurance company may take take a pass on you. If you only sky dive once or twice a year you may be in luck. Lots of speeding tickets may be a problem. Generally I say apply and you can always turn down the insurance company if you do not like their offer.

If you drop me an email I can send a sample application that covers all the questions you need to answer. (about four pages)> This covers family history, your sports etc.

All companies will not show you their cost or profit margins. You have to ask yourself at your company do you know everyone’s income? (assuming you don’t own it or there is more than five people in it.) The best you can do is look at the features and ask yourself is this what I want? Assuming it is priced competitively for all the features you are looking for, also assuming you can not take a 12 month or longer unpaid vacation without cashing in some of your RRSPs or using a line of credit or selling your house.

So can you outline what kind fine print would exclude someone from coverage. I expect a family history of disease such as cancer, heart attack, stroke, or diabetes disqualify you?

I think I also recall reading some something along the lines that “extreme sports” was prohibited, but I was confused by this loose language. Is snow boarding extreme? What about bungee jumping or ski diving? I’ve done all three and all have a lower rate of death then driving a car, but someone might call it “extreme”.

Let me know

You asked a great question. The short answer is no I don’t have a table. Here is the reasons why it would be difficult to get:

Occupation… a roofer maybe likey to be injured more than a accountant.

Also insurance companies only care about disabilities that occur to their policy owners. Generally people who have disability policies take care of themselves better than the general public and have to be healthy to get it in the first place. Having data on injuries/illnesses on dentists (for example) is something the insurance companies would not want to share with other insurance companies. As an aside, if you talk to your family doctor or dentist they will tell you they got their disability coverage while still in university! (see reasons below)

Other jobs or hobbies. Example is a lawyer who got a disability policy who also rides horses and rounds-up cattle on his ranch (Alberta) paid abit more than a lawyer who does not chase cows.

Some companies offer cheaper policies but more fine print. Their experience may be simlar to other companies, but will not pay as many claims.

Other disabilities may include cancer, or heart attack, most people think a disability may be an injury. A car accident can happen any time any where any age.

The insurance companies can be on the hook for hundreds of thounsands of dollars over the lifetime of a policy owner. So as a general rule of thumb the younger you are the cheaper it is. Yes you may pay for a longer period of time but compare that to paying a lot more later in life. As we get older, (if you are like me, your back gets sore and you have to see a chiropractor) back problems may be excluded for future coverage unless you got covered before you got problems.

I hope this helps.

Looking at your site I am thinking that you are a lawyer in the US. If you can practise law in different provinces like Ontario let me know. My understanding is (I am not a lawyer) is suing in Canada is more difficult and claims are much lower for your clients. If you have a good disability plan that may be a different story. So the best plan is not to rely on Workers Compensation unless you get sick or injured monday to friday during working hours.

Brian

I can across this http://www.canadianbusiness.com/columnists/larry_macdonald/article.jsp?content=20070607_142956_4856

“One problem, though, is that small investors will find fees in the range of $1,000 to $5,000 too high as a percentage of their assets. They will likely only be able to obtain assistance within a commission-based framework. Another problem, says Robinson, are a different set of conflicts of interest, as the example of hourly billing and retainers in the legal profession highlight”.

So unlees you want to part with $1,000 to $5,000 and have advice which you may not like, you may be lighter in the wallet (I don’t think you can get your money back after advice has been given.) Follow-up meetings will cost you more, just like seeing a lawyer or a CA. There is no free lunch.

Brian

Any fee only advisor would tell you to get more and better coverage than you have at work. Most fee only advisors will review your benefits book, which will tell you the shortfalls of company coverages..for that bit of advice, that will cost you hundreds of dollars or thousands as part of over all plan…then you have to buy the plan from a licensed insurance agent who will get a commision. Why pay double?

You don’t have to pay a fee only advisor money to tell you the obvious about disability insurance.

Brian