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Renegotiating Disability Insurance?

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  • Renegotiating Disability Insurance?

    I have spent most of my life ignoring financial issues and now find that I am paying way too much for my disability insurance with Guardian. I first bought it when I was early 30s and healthy, but have been using future increase options to add to the original policy. Now, I'm 46 with hypertension. Is it worth shopping around with other companies or is it possible to negotiate with Guardian to lower my premiums? I currently pay $1300 a month for a $15,000 monthly benefit that kicks in after 90 days. Is it more than average because I am female, have hypertension and work in New York City? Or it's higher because I applied for the additional insurance later in life? Or have I been taken advantage of with all the additional policies? To be clear, it is a very thorough policy - specialty specific, covers mental health disorders and accidents regardless of reckless behavior, etc. Also, the most recent policy was written in the last year, so perhaps Covid caused a spike in premiums as well. Clearly, I'm a newbie so be gentle with the criticism! TIA.

  • #2
    $1300 is a healthy expense without a doubt.....

    Females are more than males on disability insurance.
    Hypertension that is medically controlled is not a problem and does not increase the rate.
    Covid did not raise rates as of yet.
    NY is more than some states but less than others.
    The age when you add coverage does have a higher cost per dollar of coverage than earlier bought benefits because you are then older. If you are on a graded premium then it does not matter because your rates are going up each year.
    Mental Nervous to age 65 is more than the 24 month benefit period by about 10%.

    You should shop around, my gut is you might save your self a few thousand a year.
    Scott Nelson-Archer, CLU, ChFC
    303-953-0263 Direct / [email protected]

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    • #3
      My eyes are watering from that price.

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      • #4
        Do you still need all the bells and whistles of your DI? Sometimes on the path to FI, people forget what the insurance is actually for. To ensure you have a decent quality of life if disabled and not able to work. As you save more and more, you just need less and less supplemented from insurance in the case of being disabled.

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        • #5
          Thanks for the input! Is there any chance I could negotiate a new price for my current policies or is shopping around my only choice?

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          • #6
            I would examine your policy to see if there are "luxury" riders that you may not truly need. Sometimes I see physicians with Guardian policies that have the "graded lifetime benefit" rider or the "lump sum disability benefit" rider which significantly increase the premiums. Also if you are on a graded premium structure you are at the age when the premiums increase notably each year. It would be worth obtaining quotes from other carriers. Well controlled hypertension by itself does not lead to higher premiums.

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            • #7
              You can try to negotiate but I don't think you will find success. Rates are based on age, gender, medical specialty, state you live in, benefit load and features. Once that is all figured out then you can apply discounts. After a policy is purchased the rates and structure are set, the only real way to lower a rate is to drop the benefit amount, drop riders, extend waiting period, shrink benefit period and sometimes if you have moved states that can create a touch of rate relief. Not knowing the occupation specialty I took a guess at surgical and the rates that are in the open market today are about $1,100 monthly for $15k of monthly benefit.
              Scott Nelson-Archer, CLU, ChFC
              303-953-0263 Direct / [email protected]

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              • #8
                I need to still exercise my future purchase option rider but I think mine will be 1/3rd of that as a Hospitalist. I’m at like 80 / month for 6 grand.... and have some through work. I think he quoted me 130 a month to increase it to 9 grand plus I have my work one.

                this is Ameritas. I will increase it further once I file taxes because my base is much lower than my income because of how much extra I work.

                I purchased original policy at 28.

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                • #9
                  Yeah buying early can make a difference. What jumps out to me always is that even though she is now 47 and having bought part of it years ago it is still over priced. Buying in your early 30's or late 20's make a tremendous difference. That is why I often say that it should cost between $18-28 per month per $1,000 of benefit (depending on age, gender, specialty and state), yours costs $21 per month per $1k. Hers is costing $86 but she could drop it to $73 and maybe more if certain features are trimmed back which she probably does not need now.
                  Scott Nelson-Archer, CLU, ChFC
                  303-953-0263 Direct / [email protected]

                  Comment

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