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Everyday Cheapskate: The Most Overlooked Type of Insurance

Mary Hunt on


Standard disability insurance is fairly straightforward. If you are unable to work and are found disabled as defined by the policy, the insurance company replaces a specific percentage of the income you would have earned had you not been disabled.

In the same way that health, auto and life insurance policies have unique provisions, exclusions and stipulations, there are all kinds of provisions in a disability policy that you should consider carefully. Generally speaking, the lower the premium, the greater the number of exclusions and stipulations. Consider them carefully, and never consider anything you do not fully understand.


No. 1: Guaranteed and noncancelable. This type of policy will have a fixed premium and will stay in effect as long as your payments are kept current, regardless of health issues or other variables.

No. 2: Insures for your occupation. Make sure your policy protects you against your inability to work in your own occupation; otherwise, your insurer will not pay you unless you can't work at all.


No. 3: Payment increases. You want a rider on your policy that provides for payment increases to keep up with inflation and also in sync with your income. If you bought the policy when you made $25,000 and make $85,000 when you suffer a disability, you want to make sure you are covered at the $85,000 level.

No. 4: Pays until retirement. Some disability policies pay for only a specific period of time, say, five or 10 years. The best policy is open-ended and continues as long as you are disabled, until retirement age.

Even if you feel you are not in a position to take on another expense at this time, think about it. Do yourself a favor and find out what it would cost. Ask friends or relatives for a referral to an agent or disability insurance carrier. Query your current insurance carrier. It will cost you nothing to do the homework.

Mary invites you to visit her at, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at, "Ask Mary." Tips can be submitted at This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of, a frugal living blog, and the author of the book "Debt-Proof Living."

Copyright 2021 Creators Syndicate Inc.



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