The Benefits of Principal Disability Insurance June 2023

By | April 18, 2022

There are many benefits to Principal disability insurance, and some of these are built-in to the policy. A death benefit, for example, pays three times the disability benefit when the policyholder dies. This is applicable in some states but is not available in all. While collecting benefits, beneficiaries aren’t required to pay monthly premiums. Then, once benefits stop, they resume paying monthly premiums. This is an especially good benefit for disabled people, as monthly premium payments can be a burden.

Social media surveillance

Some insurers are turning to social media to check up on claimants who are claiming to be disabled. Some even hire investigative firms to conduct social media checks. One such company, the Marshall Investigative Group, based outside of Chicago, has seen its internet investigation unit grow 150 percent in the past year. Its director of internet presence investigations, Thom Kramer, told Business Insider that it has done social media monitoring for claims since 2015.

Limitations

Many individuals wonder whether there are any limitations on principal disability insurance policies. While it is important to consider the total amount of benefit you can receive, you must remember that there are limitations, as well. For example, a policy may only cover you for up to twenty-four months if your condition is physical, but a policy with a two-year limit could cover you for as long as a year. This is an unfortunate limit on any disability insurance policy, but it can be a major factor for claimants.

Exclusions

Before purchasing a disability insurance policy, it is essential to understand its exclusions and limitations. The Social Security Administration’s Statistical Report on Social Security Disability Insurance Program offers valuable information on disability insurance. A disability lawyer can help you understand the requirements of your policy, and determine if the terms are legal. An experienced disability attorney can also enforce any exclusions that are unclear or ambiguous. Exclusions are common ways for insurance companies to deny legitimate claims.

Non-cancelable

While the premium for Principal disability insurance may be more than you’d like, it’s well worth it for peace of mind. The policy has built-in benefits, including a death benefit. This coverage pays out three times the disability benefit if you die while receiving disability benefits. In some states, this benefit is only available to certain beneficiaries. While collecting benefits, you won’t have to pay monthly premiums; when the benefits end, you resume premium payments.

Guaranteed-renewable

A guarantee is a condition that is part of a policy. A guaranteed-renewable policy will not be changed or canceled by the insurer as long as the insured person pays the premiums. This guarantee is different from the non-cancelable, which can be canceled. In addition, the rates for a guaranteed-renewable policy cannot increase or be decreased while the insured is paying the premiums.

COLA rider

One of the most important features of a principal disability insurance policy is a COLA rider, which ensures that the benefit amount increases each year to keep pace with inflation. This rider applies to both residual and total disabilities and will increase the monthly benefit amount by a fixed percentage every year. The COLA rider can either be on a simple or compound basis, so it can add significant value to your policy if you become disabled early on.

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