What Financial Documentation Do I Need To Apply For Disability Insurance?

You have taken a big step in securing your financial future by applying for disability insurance. You may have received an email or phone call from the agent asking for financial information such as a recent pay stub, a copy of last year's W-2 or a copy of your entire tax return. But why would they need all of this information? You may ask yourself, €Isn't this an invasion of my privacy? What if I don't want to provide this? €The simple answer is that they need to make sure that they are not over-insuring you. If someone were able to collect more money being disabled, they probably would not have an incentive to want to get better and try to go back to work.

Why might the underwriter want your tax returns though? Why can't they just use a pay stub or a copy of last year's W-2? For one, if you are self-employed you most likely would not receive a pay stub or W-2. A self-employed person would have either a schedule C, K-1 or a corporate tax return, depending on how the business is set up. In addition, if you have any unearned income such as rents or capital gains, the underwriter would want to see how much they are. If you have a significant amount of unearned income, the underwriter may reduce the amount of coverage that you would be eligible for.

The insurance company has every right to ask for this information. Without it, they would not be in a position to offer you disability insurance coverage as there would be no way for them to confirm your income.

Please understand that the agent and home office have a duty to protect your private information, such as your tax returns. Once the information is received, it is typically scanned, saved to a secure site and then shredded. This helps to ensure that your information is not accessible except to those who need to see it.

Registered representative of Park Avenue Securities LLC (PAS), 1355 Piccard Drive, Suite 380 Rockville, MD 20850. Securities Products and Services offered through PAS 240-683-9700.

Laurence J Laskin, Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York. PAS is an indirect, wholly owned subsidiary of Guardian

Laurence J Laskin is not an affiliate or subsidiary of PAS or Guardian

PAS is a member FINRA, SIPC

The views and opinions expressed herein are that of the author and do not represent the views and opinions of The Guardian Life Insurance Company of America, its subsidiaries or affiliates.