In New Jersey, a long-term disability insurance policy provides a source of income for people who become disabled and cannot work. In addition, it provides a way to keep an individual’s or family’s finances stable during a prolonged or permanent absence from the workforce.
Several factors determine the cost of a long-term disability policy, and the amount may vary depending on your choices when signing up for coverage. For example, the price you pay for your policy depends on your age, health status, occupation and the coverage amount you want to receive if you become disabled.
Disability insurance can be complex, and providers consider many things when finding the best policy to fit your budget and coverage needs. The following includes some of the main factors insurance companies consider when calculating policy premiums.
When you apply for Long-term Disability Insurance, you will receive a higher premium cost the older you are when taking out the policy. As a person ages, the probability of becoming disabled increases, and the increased risk leads to a higher premium.
Your current health status matters when applying for disability coverage. If you have any pre-existing conditions, they will affect the cost of your premiums. In some cases, pre-existing health issues could prevent you from qualifying for disability coverage.
Type of job
If you work in a high-risk industry or job, you may fall into a higher-risk category and can expect to see higher disability insurance premiums. Each insurance company has different opinions on which jobs are high-risk, so researching multiple companies and policies could pay off in terms of finding lower premiums.
Some industries and occupations considered high-risk by many disability insurers include construction jobs, healthcare workers, law enforcement and the manufacturing industry.
Amount of coverage
The cost of disability coverage depends partly on the amount of coverage you want or need if you should become disabled. Higher coverage amounts will lead to higher premium payments.
Individuals can reduce policy premiums by agreeing to a more extended waiting period before receiving benefits if they become disabled. Another method to reduce premiums is agreeing to accept benefit payments for a shorter time.
Researching different insurance companies and policy options can pay off by revealing a provider that offers affordable premiums and coverage to keep your family financially safe.