Long-term and short-term disability are among the few kinds of insurance financial guru Dave Ramsey recommends for working families. Without insurance to replace income, even a moderately long illness or injury can mean serious hardship. Perhaps unfairly, if you have a chronic illness, including diabetes, getting qualified for disability insurance can be difficult.
Insurance And Risk
Insurance is a risk-based business. Much like casinos calculate the odds of their games, an insurance company analyzes injury and illness statistics to set the prices on their policies. According to insurance executive Courtney Rogers, the more likely somebody is to suffer from a disability, the more expensive insurance rates will become. As that likelihood approaches a certainty, many insurance companies will refuse to insure a high-risk individual at all.
Diabetes And Risk
According to Rogers, diabetics are at risk for long-term disabilities ranging from blindness to amputation. The risk of insulin shock and coma also increases their risk of accidental injury. Because of this, diabetics are often considered high risk in terms of rating for disability insurance.
Mitigating Risk
Treatment and personal history are your best hedges against receiving a bad rating because of diabetes. An individual diagnosed only a few months ago, or somebody with a history of diabetes-related complications, will receive a poor rating. Somebody with a 10-year history of successful, disability-free diabetes may qualify for a much better, or even normal, rating.
Mitigating Bad Rating
If you have diabetes and need disability insurance, you can reduce your monthly premiums by raising your deductibles, extending your waiting period and/or lowering your maximum benefit. A deductible is an amount of money you pay out of pocket before your insurance kicks in. The waiting period is the amount of time that must pass between missing work and getting paid. The maximum benefit is the most a company will pay out on a policy, expressed as a dollar amount or a length of time. In all three cases, the less money the insurance company must pay out, the less they will charge you for the policy.
Group Policies
Another option for diabetics wanting affordable disability insurance is to find a group policy. A group insurance policy is negotiated by a group, such as an employer or a trade union. In many cases, group policies require the insurance company to insure all group members at the same price, regardless of individual medical history.
References
- "Exam Cram: Life and Health"; BiSys Education; 2008
- Courtney Rogers; insurance executive; Richmond, Virginia
- "Total Money Makeover"; Dave Ramsey; 2008
