Disability Insurance: Maintaining Your Individual Policy
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The key to keeping an individual disability income policy in force is keeping the premiums current. If the policy ever lapses for non-payment, the insurance company may be willing to reinstate the coverage. However, the company has the right to ask for proof of good health - and almost always will.
If you have a medical condition, the insurance company will probably not reinstate the policy and your coverage will be lost.
Most states require insurance companies to allow a 31 day grace period after the premium due date during which payment can be made without the coverage lapsing. Prudence suggests that you don't rely on a grace period if you can avoid it. Too much can go wrong with the mail and with insurance companies.
To assure timely payment of premiums:
- Keep track of when premiums are due.
- Consider arranging for automatic payment of premiums. You can set it up with a bank to make the payments automatically. Alternatively, the insurance company may be able to automatically withdraw the funds.
- Check during the grace period to make sure each payment was made. This may seem like overkill if payment is automatic, but things do happen.
- If you can, stay a payment ahead. If you run into a financial crunch, you'll be a step ahead.
To Learn More
More Information
Disability Insurance: Long Term: IndividualRelated Articles
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