Disability Income insurance is something that most young professionals never think about. It’s difficult for most young people to understand the need for Disability insurance because the thought of becoming disabled almost seems unrealistic. It does happen however, and according to Social Security Quick Facts, 3 in 10 young workers will become seriously disabled before retirement.
As an attorney “to-be”, you have a lot of hard earned potential – studying and working hard through undergrad, only to be faced with a terrifying LSAT and 3 years of Law School on top of that. Even though your income may not be significant yet, you’ve invested a lot of time and work into your academia and professional development. Now you need to look at ways of protecting your hard work, potential and future income – starting with Disability income insurance.
As programs are available to medical residents, Law students in their final year are able to obtain Disability coverage as well. As a recent graduate or student in your final year, protecting your future earnings is important and knowing what to look for in a Disability policy is even more important.
First of all, you should know that as an attorney you will be at the top level Occupation classification. Occupation Classes are how insurance companies separate pricing based on the overall risk of specific occupations. With most of the major insurance carriers, Attorneys are classified at the top and therefore the cost of coverage is the lowest of any profession. This ties in perfectly with the fact that you are still young right now and most likely in good health. In order to obtain Disability insurance, applicants must qualify medically and therefore being in good health is certainly to your benefit. Additionally, you are able to lock into a guaranteed level premium in order to take advantage of your young age.
As already mentioned, you’ve worked very hard to get where you are and to have the potential you have, therefore you need to be sure your Disability insurance is protecting your specific profession. In order to do so, you need to look for True Own-Occupation Disability insurance. As you continue your search for coverage, you will find that many companies present their product as Own-Occupation, but the truth is that they offer a modified version of the real thing. True Own-Occupation Disability coverage will pay you a benefit if an injury or illness prevents you from doing the work of an Attorney, even if you decide to work in some other profession. The modified version requires that you not to be working at all. The number of companies offering the True Own-Occupation definition of total disability are somewhat limited – be sure to work with an agent who is knowledgeable on Disability insurance and ask if he/she is showing a True Own-Occupation definition of total disability.
To expand the parameters of your Disability coverage, you need to be sure that your policy provides Residual or partial disability benefits. A basic Disability policy qualifies claimants based upon a definition of total disability only, which is an all or nothing approach. By adding the Residual benefit to your policy, it will include debilitating injuries and illness that only cause a partial loss of duties and/or income. Consider the obvious…Do you think you are more likely to experience a partial disability or total disability? Make sure that you have this covered – it’s a low costing benefit that most would consider essential. Additionally, not all residual riders are created equal. Look for one that provides residual benefits and recovery benefits for the policy’s full benefit period.
Along with the primary provisions you should be aware of, there are optional policy riders that companies offer in order for professionals to enhance the coverage that a policy provides. As a young Lawyer, part of the purpose of purchasing Disability insurance is to protect your future income. To enhance this protection, you should elect to include the Future Increase Option rider on your Disability policy. This is an optional rider that allows you to increase your monthly benefit as your income increases in the future, regardless of your health, as long as you are not on claim. The amount of benefit that you will be eligible for as a last-year Law student is somewhat limited (about equal to coverage for $60,000 annual salary) – by purchasing this optional rider you are guaranteeing your ability to increase your coverage to remain proportionate to your higher income.
Another optional rider to seriously consider is the Cost of Living Adjustment (COLA) rider which provides benefit increases to keep up with inflation while you are on claim. This is particularly important because you are so young. If you were to experience a long-term claim that begins at a young age, your benefit will lose its purchasing power over time without this rider. Between being very young and also being in the top occupation classification, this rider is fairly inexpensive and worth giving consideration.
There are many other riders to consider as well, and you should ask the person you decide to work with about them. The benefits, provisions and riders reviewed in this article however will provide you with a good starting point and very comprehensive coverage. Even if the firm you work with provides you with a group Disability policy, it is unlikely that the quality of a group policy would come anywhere near the quality of an individual policy. The cost for Attorneys is very affordable and the benefits are as good as it gets.
