The most obvious and dramatic cost of waiting or delaying to take a disability insurance policy is the unfortunate possibility of becoming disabled and losing your income without having insurance. Statistics indicate that it is more likely to become disabled for more than 90 days at any age from 20 through 65 than it is to die.
Between the ages of 35 and 65 three out of ten people who are actively at work will become disabled for 90 days or more
Nearly one in five will become disabled for five years or more before age 65.
So, the first cost of waiting is the “rolling of the dice” with your financial position. What about the pure cost, financially, of waiting? Since the charge for disability insurance premiums is based on your age and occupation at the time you take a policy, the older you are when you take it out, the more you pay per year. You could say that if you wait you save the premium that you didn’t pay. That idea may not agree with the facts. Here’s an example: Let’s say William, a physician, age 30, could get disability insurance with a monthly benefit of $5,000 per month for a premium of $1784 per year guaranteed to stay at the same premium until age 65. The total premiums paid would be $62,440 over those years. If he waited until age 45 to start the policy, he would pay $3,356 per year for 20 years for a total of $67,120. By waiting William paid out more cash in total and did not have the coverage for the 15 years.
If William became permanently disabled at age 35 and had the disability insurance, he would have collected $1,800,000 by age 65. Looking at it another way, if he had waited and not taken the policy, he would have lost $1.8 million.
Don’t delay. This is important to you. Learn rmore.