price-vs-valueIn the insurance world it’s very hard to overpay, or under pay for a policy.  Each company employs a team of actuaries that comb through thousands and thousands of statistics in order to understand a certain risk.  They then have to price their various products in a way that makes them profitable, and also competitive.  That’s why when you see a very inexpensive insurance product such as term life insurance or accidental death & dismemberment insurance, you can be sure that you will likely never file a claim.

If the risk is all the same, why is one policy more or less expensive than another?  And what should you do to find the best deal?

Here are a few reasons why you might be overpaying for your disability insurance policy, and what you can do about it:

  • Not all plans are created equal, and insurance companies make it really hard to compare apples-to-apples. There are about 6-7 major insurance companies that offer “own occupation” disability coverage.  However when you read the fine print you will notice that not all “own occupation” language is created equal (Own Occupation Blog Post).  Some policies also limit claims for mental/nervous issues.  While other companies included random benefits that will likely never be used, but that you still end up paying for.
    • Conclusion – Make sure you aren’t overpaying for benefits & features that you don’t need.
  • The insurance company just doesn’t like you. Well maybe not you personally, but they don’t like your occupation.  If an insurance company becomes very competitive in one occupation, they tend to sell a lot of policies, and over time their book of business becomes overly weighted to that group.  Insurance companies would prefer to diversify their risk over multiple occupations.  One way to accomplish this is to increase premiums for a specific occupation, while at the same time reducing premiums for another occupation.
    • Conclusion – If you are shopping around and find a policy that seems to be far too expensive, it could be because that insurance company doesn’t want to increase their book of business with your occupation.
  • You are a female, and unfortunately females tend to pay anywhere from 30-40% more than males do for disability insurance. Women get a discount on life insurance because they live longer, however they pay more for disability insurance because for some reason they get disabled more than men do.
    • In order to avoid paying higher rates simply for being female, you can either move to Montana (the only state that requires equal pricing for male/female) or apply for a group discounted unisex rate. Some companies will offer this discount to groups of as little as 3 people from the same employer.  Females can expect to save up to 40% compared to normal rates.

You can pick your policy, but you can’t pick your disability.  Make sure you have the right team on your side to look out for your best interest.  At Dentists Disability Insurance that is all we do.  We help dentists just like you find the right policy to fit your needs and budget.  Give us a call today and see how we can help.