Disability Insurance: Long Term: Individual

Whether or not your benefits are taxable depends on how the premiums were paid.

If you pay the premiums with after tax dollars (you don't deduct the premiums for tax purposes), the income is tax free.

If you deduct the premiums, the income would be taxable.

Applying For Individual Long Term Disability Insurance

You can start the application process either with an experienced insurance broker or directly with companies that write these policies. It is recommended that you use a broker because it is easier to apply without disclosing your name.

If a quote is obtained based on your medical history, do not expect that it is binding until a policy is actually issued.

To apply:

• You will be required to complete an application which requests your current and past health condition. Do not lie and expect to rely on the "contestable provisions" of a policy which provide that a policy is not contestable after a period of time, such as two years from the date of issuance of the policy.
• To take a physical exam.
• That your doctor will be asked to send copies of your current and past health condition. It is advisable to let your doctor know to expect such a request and to ask that that it be responded to on a timely basis. Follow up with the doctor to be sure the information is sent to the company.

There is no standard period of time between the application and date of issuance of a disability policy. Expect at least a few months.

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