Have you ever asked yourself the question, should I keep my disability insurance contract or should I cancel it?
First, how important is your income? How important is your income to your family? If your answer is: “My income is still important”, chances are you should keep your insurance contract.
And that is for a number of reasons:
As you get older, the cost of coverage goes up. If you wait to buy it later in life, it’s more expensive. If you have coverage in place and you cancel it and decided you made a mistake and want to repurchase it, you’re likely to pay more down the road to repurchase the exact same coverage.
Your health may have changed. If you bought the policy 10 years ago, has health changes and you cancel it then you decided to rebuy it down the road, all those health changes may cause implications.
For example, if you had some sort of counselling for mental health, you may have a mental health exclusion. If you have gone to a chiropractor or massage therapist for a sore back, you may have a back exclusion.
If you need your income to pay your mortgage, and put food on the table, put shoes on your feet, I really strongly encourage you to keep the policy the way it is. Or have a second opinion to make sure it is a good quality contract that you can depend on.
However, if you are close to retirement, have done well for yourself, have a lot of savings that you can rely on for your retirement, and you’re working because you want to work not because you need to work then it makes sense to cancel this insurance plan. It is because you no longer need to replace your income if you become disabled because technically you can retire tomorrow.
If that’s your situation, it may make sense to take that premium and put it towards a different type of coverage like long-term care, or life insurance for estate reasons.
Hopefully, this makes you understand why insurance is so important. I always ask my clients to think about how their life will change if that income stopped. If this scares you, then you should keep your insurance the way it is.