Disability insurance

Question: I am currently in the process of attempting to obtain personal disability insurance and am quite frustrated with the level of customer service that I have encountered. My wife and myself have both, over the last month and half attempted contact with insurance companies and/or agents. Each time we pass through with the filling in of email request information preceding an eventual reply within "five days" so says Assurity for instance. What follows however is a complete blow off by these companies. Is the economy that good? Are there too few people now to help process applications and take my money in the form of premiums? Could you help with some ideas on how to get personal disability insurance? Are there some companies more adept at this than others? I look forward to your response. Dave, Wichita, KS

Answer: There are no easy answers. It reads as if you are doing the right thing. I am surprised that an insurance agent hasn't been able to work with you to find a good policy. By the way, I would set up a personal visit with an insurance agent.

A couple of factors could be conspiring against you. Perhaps there is something in your health history, the risks embedded in your job, or uncertainty about your earnings profile that is making insurance companies wary of doing business with you. It also could be that your timing isn't great for finding an individual policy through no fault of your own. The potent combination of the Great Recession and aging population is pushing up disability claims. Insurance companies may be extra wary of taking on new business or risks.

You may have already done this, but I would approach the biggest writers of individual policy disability insurance, like Northwestern Mutual, UnumProvident, and MetLife. I would also approach some of the bigger insurance companies that have their own agents and market most insurance products, such as State Farm. Again, I would set up an appointment for a consultation.

Get a recommendation from anyone you know in your line of work that has bought an individual disability policy. That's often the best route to find professional help since you also can get a straight-forward opinion on service and helpfulness.

Disability insurance is important and I'm glad you're in the market. But disability insurance is complicated and the individual market isn't cheap. The Insurance Information Institute--an industry trade group--offers some basic information here. The Consumer Federation of America--an advocate for consumers--has a good brochure.

Does anyone who has been in the market to buy an individual disability policy have any suggestions? What was your experience?

About the author

Chris Farrell is the economics editor of Marketplace Money.
Log in to post2 Comments

I manage about 200 plus agents and i do not know one that wouldn't jump at a bona fide lead and make contact within 24 hrs. DI insurance is the trickiest to get b/c it is used so much BUT if you do happen to be ineligible due to a knockout health or income issue, a quick answer should be readily available.

Lyman Kiser
Borker Manager
Raleigh, NC

I'm an independent insurance broker that approaches insurance from a consumer advocate's point of view. The lack of response you've received from the companies you've contacted is odd. THE MOST IMPORTANT THING FOR YOU TO DO IS YOUR OWN HOMEWORK ON ANY CARRIER YOU'RE GOING TO SIGN WITH. Sorry, I'm not yelling but I just wanted to be sure that this point isn't overlooked. There are some great insurance carriers for disability insurance but always check the claims history of the companies you're being quoted. If you do need your disability insurance to pay out, be sure they have a great history of doing so. Use the internet to search lawsuits and unpaid claims from insurance carriers you are interested in. Run a check on the one's listed in the article, to start. Also, check with your state's Insurance Commissioner's Office to see what their history has been. If you're going to be surprised, be sure it's before your money and future is on the line.

Mark Jorgensen
Independent Insurance Broker
Advocate Insurance Services, LLC

With Generous Support From...