Recently, my truck was on fumes and I needed to stop to fill up for gas. Fortunately, I had the choice to fuel up at one of two opposing gas stations advertising significantly different prices.

As I waited at the pump, I wondered when I would have been comfortable paying the higher price for gas. If I were in the desert and out of fuel, surely I would pay any price. Then I thought about how this relates to disability insurance sales and the difference between price and cost.

Price vs. cost

Price is what we shop for and select when we have choice. However, the benefits of a product — especially disability insurance — may be affected by paying too little.

I recently compared the premiums for some individual disability income insurance plans paid by doctors. The price difference varied significantly. However, along with the obvious price differences, I noticed that some plans include extras that help drive down long-term costs for a policyholder. These include:

Contracted versus manifested plans.Disability insurance policies are so word-oriented that one claim might be paid while another identical claim is denied — based on one word. An example of this in a disability policy is if a sickness is defined as “manifested” or “contracted.”

For example, consider a doctor who is unaware of a cancer diagnosis when he or she applies for disability insurance and is diagnosed after the policy is in force. If his or her disability policy defines sickness as contracted, then the claim may be denied because he or she contracted the cancer before purchasing the policy. Brokers should look for policies that define health diagnoses as “manifested” to help fully cover their policyholders.

Not requiring an income loss during the first 90 days of the waiting period. Some lower-priced competitors require an income loss after taking a disability leave. This means the true cost during a partial disability could be a few months of income, which may not be the case for other policies.  

The classification of mental disorders and the inclusion of disabilities due to stress. Many plans limit mental disorders to two years of benefits unless the plan participant is confined to the hospital. Stress is a major contributor to disability today; having benefits limited to two years can cause even more stress.

Substance abuse is also limited to two years with many plans. The Standard’s experience shows that some types of doctors have a higher incidence of substance abuse than other occupations. Brokers should be aware of these statistics and consider selling plans that do not limit substance abuse.

The True Cost of Disability Insurance

It is not a big deal to run out of gas, and we even get warnings that remind us to fuel up. But we don't get warnings if the fuel we are buying costs less because it is lower quality. The same principle applies when purchasing disability insurance.

As policyholders cannot choose their disability, our customers need to have the right information when choosing disability insurance. It’s your responsibility to ensure they understand the true cost.

Brady is the national account sales director for individual disability income insurance at Standard Insurance Company . Steve has devoted his 30 years of experience in the disability industry to empower his sales teams through education and training. He can be reached at (971) 321-8240 or at

The Standard is the marketing name for StanCorp Financial Group, Inc. and its subsidiaries: Standard Insurance Company, The Standard Life Insurance Company of New York, Standard Retirement Services, Inc., StanCorp Mortgage Investors, Inc., StanCorp

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