Future Purchase Option

If you’re in the disability insurance market, don’t overlook the future purchase option. The future purchase option is a part of a disability insurance policy where you can opt to have your insurance coverage get larger in tandem with your income...in exchange for higher premiums, of course.

Having a future purchase option would mean that, if you got a raise, you’d also get better disability insurance coverage, all without having to go back and redo or edit the contract (since it’s just a part of the contract). To make this a reality though, you’d have to let the insurance company know, and you’d have to pay higher monthly premiums, too.

A future purchase option reduces the transaction costs for both the insured and the insurance company. Who knew insurance companies actually like to reduce red tape? Well...sometimes, anyway.