How are disability premiums determined?
Disability insurance premiums are determined by a couple of things. Number one, the company will look at your occupation, some occupations are safer than others. An insurance company will look at the occupation and actually give it an occupation class. So, as an example, an architect or an attorney might be in the premier class but somebody like a plumber or an eletriction might be in a much lower class. The chances of being disabled for an electrician are higher as an electrician might be electrocuted, and he would have a much higher chance of being electrocuted and becoming disabled. So, the insurance company will say, based on their knowledge of your occupation, "We are going to surcharge the premium to offset that". They are also going to look at your health and stability of your occupation, your tax returns, they're going to look at a lot of things. Your health history is critical and they are going to come up with a price. There are people in insurance companies who have expertise in putting a dollar value on disablitily insurance. Based on all of the other factors they come up with a price and of course you have to decide if you are going to go ahead with the insurance or not.
