How to use AI tools to research long term disability insurance

A long term disability policy can be a powerful tool to help protect your finances and lifestyle by providing a stream of income at a critical time. But to provide the best protection for your situation — at a reasonable cost — you have to get the right kind of policy, and you may want it to be tailored to your specific needs. As a result, a growing number of people are taking advantage of powerful AI research tools to help better understand the ins and outs of long term disability insurance before taking the next step — contacting an agent to get a policy. However while AI can enhance your preparation, there are some issues to be aware of. AI can miss important context and even “hallucinate” – make up things that simply aren’t true. So it’s always important to verify sources for any important facts or claims. And critically, AI can’t completely replace the professional guidance of an insurance professional who understands the seemingly subtle yet meaningful variations among the different LTD insurance companies and products.

Using this guide

If you choose to use AI research, the key to getting the answers you need lies in creating the best, most useful prompts for your intended purpose. This guide will show you how to create five different templated queries:

• Template 1 may help you get answers — tailored to your situation — about key things to look for in an LTD policy, including coverage features, approximate costs, terms and concepts you’ll want to understand, and specific questions to ask when you contact an agent.

• Template 2 may help you get a better understanding of how your specific occupation and job duties impact the type of LTD policy you need, considerations when applying for a policy, and specific features to include with your coverage.

• Template 3 is designed to help you define and compare the most relevant LTD options for your needs and budget.

• Template 4 may help you get more out of your meeting with an agent by creating specific questions and discussion points that will help them provide the most targeted recommendations for your needs.

• Template 5 is an enhanced AI template designed to help you further explore policy features you’ve decided you want, and better understand the capabilities of various long term disability providers.

Start by gathering basic information

The answers you provide will help you create the AI queries you need. Where appropriate, we’ll also explain why specific types of information are important to the process of getting a long term disability policy. You can also expect to provide this information when filling out the application form for a disability policy. Note that in many cases we will ask you to define a range of values, as opposed to a specific number. The reason? Entering specific, Personally Identifiable Information (PII) into an AI model is not recommended.

Income & career:

☐ Current annual income range (e.g., $100,000 - $150,000): $__________

An LTD policy helps you protect income, so this is key information needed to help determine monthly benefit amounts in the event of a claim, as well as policy premiums, coverage limits, and even financial suitability for your needs.

☐ Primary occupation: ______________

How you earn income matters, because insurers use detailed information about your specific job duties and work environment to determine your coverage risk, which affects cost. For your initial research, a generic job title or descriptor (e.g., software developer) is sufficient.

☐ What general hazards, if any, are associated with your job duties and/or work environment? _____________________________

Jobs are assigned occupational classifications: typically, less risky and more sedentary professions (like architects or accountants who work in offices) qualify for lower premiums and better coverage, while physically demanding or hazardous jobs (like high construction or oil-rig work) result in higher premiums or stricter policy limits.

☐ Do you have multiple income sources? Yes / No

☐ What percentage of your income is from passive sources, like rent or investment earnings? 0% / 1%-10% / 11%-20% / 21% - 30% / 31% - 40% / Over 40%

Disability benefits are designed to replace a portion of your income – typically ranging from 60% to 80%, depending on the terms of the policy. If you have income from sources other than work, a lower level of benefits may be more appropriate.

Coverage preferences:

☐ What percentage of income do you want your policy to replace? Choose a number from 60% to 80%: _____%

Choosing a lower benefit level will typically reduce the cost of a policy, and a higher benefit level will typically raise the cost.

☐ Do you prefer "own-occupation" coverage, "any-occupation," or have no preference? ____________

An “own occupation” policy provides benefits when a disability keeps you from perform your specific profession or specialty; an “any occupation” policy provides benefits only if you are unable to perform any kind of work – even a job outside of your profession. The distinction is critical, especially for high-earning specialized professionals. For example, a surgeon who loses part of a finger in a car accident might never be able to operate again, even though they might still be able to practice medicine.

☐ Preferred benefit period: 2 years / 5 years / Until age 65 / Other

This is the maximum length of time you can receive payments under the terms of the policy. A longer benefit period increases policy cost, and a shorted benefit period reduces cost.

☐ Maximum monthly budget for premiums: $_________

Generally for a LTD policy, you should expect to pay between 1% and 3% of your annual income in premiums, depending on factors like your age, health, occupation, the benefit amount and period, and specific policy options.

Health and risk factors:

☐ Any current health conditions? ______________________________

☐ Family history of disability? _________________________________

☐ High-risk hobbies or activities? _________________________________

Personal and family medical history impact your risk of developing a disability during your working years, and the cost to insure you. Similarly, high-risk hobbies such as scuba diving, and lifestyle choices like tobacco use, tend to increase policy cost.

Financial situation:

☐ Current emergency fund: ______ months of expenses

LTD policies have a waiting period (also called an elimination period): it’s the amount of time after you are disabled until you are eligible to start receiving payments, typically ranging from six months to a year. If you have a larger emergency fund – and can afford a longer LTD waiting period – that can help lower your premiums.

☐ Do you have existing disability coverage through employer? Short term disability: Yes / No Long term disability: Yes / No

If you have short term disability through work, you may be able to lower LTD premiums by opting for a longer waiting period. And if you already have workplace LTD coverage, you may consider getting a smaller, less expensive supplemental policy as an individual.

☐ What other types of insurance are a priority? Life insurance: Yes / No

You may want to consider a combination policy that includes different types of coverage.

Keep these answers at hand — you'll use them in your research and as you speak with insurance professionals to apply for coverage.