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5 Best Disability Insurance Companies

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Did you know that having disability insurance is one of the most important types of insurance that you need? If you currently have a job or earning any type of income, then it is absolutely essential. This article breaks down the best disability insurance companies.

best choice

Breeze insurance logo
  • As low as $9 per month
  • Get covered in just 15 minutes
  • No medical exam required

BEST COMPARISON SITE

Policygenius logo
  • Online insurance comparison
  • User-friendly tools & calculators
  • Easy on-boarding process

BEST LONG TERM DISABILITY

Guardian logo
  • Longer term coverage
  • Trustworthy company
  • Instant quote

Disability may be the most difficult type of insurance for the average consumer to understand.

The basic concept is simple – the policy pays you a monthly income benefit when you are unable to work due to either an injury or illness.

But the complication comes in the many different possibilities disability presents, as well as the many policy provisions designed to deal with each.

In addition, many people believe they’re covered at work, and don’t need an individual policy.

But in today’s world, where more people work on a contract basis, or in the gig economy, disability insurance must be purchased on an individual basis. 

And if you’re self-employed, it’s even more important.

For that reason, we’ve assembled this list of the best disability insurance companies and comparison sites.

We hope you’ll seriously consider getting an individual disability policy.

How We Picked the Best Disability Insurance Companies & Comparison Sites

As you’ll see when reading this guide, our choice of the best disability insurance companies and comparison sites is hardly arbitrary.

We used the following criteria to make our determinations:

BEST FOR CATEGORY

Rather than attempting to assign a numeric rank to the companies and comparison sites on this list, we’ve instead indicated what we believe each to be best for. We believe that will be more instructive than a simple ranking.

AGE RANGE OF AVAILABLE POLICIES

Where indicated by each company, we’ve provided the age range each covers. This is generally within working age, stopping at retirement.

MONTHLY BENEFIT AMOUNTS

Where indicated, we’ve provided the monthly benefit range each provider offers.

BENEFIT TERM

Where indicated, we’ve provided the number of years you can expect to receive benefits under the policies offered by each provider.

WAITING PERIOD

This is the amount of time you will need to wait before receiving benefits after being disabled. This typically ranges anywhere from 30 to 365 days, and you can choose the waiting period of your policy, with the understanding that the shorter it is, the higher your premium will be. 

OPTIONAL POLICY PROVISIONS

Where indicated, we’ve included special provisions and policy options offered by each provider.

There’s one other issue that’s a limiting factor when it comes to disability insurance, and that’s the lack of popular advertisement.

On TV, in the print media, and all over the Internet, we’re bombarded with advertisements for life, health, auto, homeowner’s and renter’s insurance. 

But it’s rare to see an ad for disability insurance, if you ever see one at all.

That means anyone who is shopping for disability insurance may face a steep learning curve.

You may not even know the right questions to ask!

Along with providing what we believe to be the best disability insurance companies and comparison sites, we’ll also include extensive educational information helping you to learn exactly what disability insurance is, what it does, and how you can save money when you purchase a policy.

Quick Summary of Our Picks

The table below summarizes the main features of each of the seven best disability insurance companies and comparison sites.

It’s laid out in order of the companies reviewed below, so you can skip down to a company that interests you based on what you see in the table.

Company

Best For

Age Range

Monthly Benefit

Benefit Term

Waiting Period

Optional Provisions

Fast Approval

18 to 60, up to age 65 or 67

$500 to $20,000

Not Indicated

30 to 365 days

Partial disability, modification, survivor benefit, vocational rehab, non-cancelable, automatic benefit increase, catastrophic disability, critical illness, guaranteed insurability

Shopping Multiple Providers

Varies by insurance company chosen

Varies by insurance company chosen

Varies by insurance company chosen

Varies by insurance company chosen

Varies by insurance company chosen

Longer-term disability

To age 67

Not indicated

10 years up to retirement

30 to 720 days

Partial disability, supplementary disability, future increase option, extended benefits, student loan protection, unemployment waiver of premium, cost-of-living adjustment

3 Best Insurance Companies Reviewed

Once again, the disability insurance companies and comparison sites provided in this guide are not ranked numerically.

Each is listed by what we believe it to be best for, as well as the criteria described above, and any other relevant information about each.

Best for Fast Approval: Breeze

Breeze Insurance icon

Breeze advertises they can get you a disability insurance policy approved in just 15 minutes.

That’s because they’re an online provider, enabling you to complete the entire application through their website.

The catch is that you must be healthy and employed, in which case you may not even require a medical exam.

Breeze’s disability policies are underwritten by Assurity, which is one of the better-known and more highly rated insurance companies in the industry. 

But as is usually the case with online fintech insurance providers, they work best for applicants who are young and healthy. 

Generally speaking, if you’re over 50 and you have one or more significant health conditions, Breeze may not be the best option for you.

Age Range of Available Policies: 16 to 60 (guaranteed renewable to ages 65 or 67)

Monthly Benefit Amounts: $500 to $20,000

Benefit Term: Not indicated

Waiting Period: 30, 60, 90, 180, or 365 days

Optional Policy Provisions: Partial disability, modification, survivor benefit, vocational rehab, non-cancelable, automatic benefit increase, catastrophic disability, critical illness, guaranteed insurability.

Best for Shopping Multiple Providers: Policygenius

Policygenius icon

Policygenius is perhaps the best-known online insurance marketplace in the industry.

They have a major advantage in that not only can you get disability insurance through the platform, but also all other types of coverage.

This includes life, auto, homeowner’s, renter’s, business, and even pet medical insurance.

It offers a one-stop shopping center for all your insurance needs.

And even though you may be getting different policies from various companies, you’ll have an opportunity to shop between multiple carriers for each coverage type.

If you apply for disability insurance through Policygenius, you’ll complete a single online questionnaire, which will produce (hopefully) quotes from several companies.

These will provide the basic parameters of each plan, including the benefit amounts, benefit term, waiting/elimination period, premium cost and other factors.

Just be sure that when you are comparing quotes between different companies that the coverage amounts and terms are roughly the same.

For example, one company may have a much lower quote only because it’s offering inferior coverage. 

Age Range of Available Policies: Varies by insurance company chosen.

Monthly Benefit Amounts: Varies by insurance company chosen.

Benefit Term: Varies by insurance company chosen.

Waiting Period: Varies by insurance company chosen.

Optional Policy Provisions: Varies by insurance company chosen.

Best for Longer-term disability: Guardian Life

Guardian Life icon

Policygenius is perhaps the best-known online insurance marketplace in the industry.

They have a major advantage in that not only can you get disability insurance through the platform, but also all other types of coverage.

This includes life, auto, homeowner’s, renter’s, business, and even pet medical insurance.

It offers a one-stop shopping center for all your insurance needs.

And even though you may be getting different policies from various companies, you’ll have an opportunity to shop between multiple carriers for each coverage type.

If you apply for disability insurance through Policygenius, you’ll complete a single online questionnaire, which will produce (hopefully) quotes from several companies.

These will provide the basic parameters of each plan, including the benefit amounts, benefit term, waiting/elimination period, premium cost and other factors.

Just be sure that when you are comparing quotes between different companies that the coverage amounts and terms are roughly the same.

For example, one company may have a much lower quote only because it’s offering inferior coverage. 

Age Range of Available Policies: Varies by insurance company chosen.

Monthly Benefit Amounts: Varies by insurance company chosen.

Benefit Term: Varies by insurance company chosen.

Waiting Period: Varies by insurance company chosen.

Optional Policy Provisions: Varies by insurance company chosen.

FAQ's

How much does disability insurance cost, and how are premiums determined?

You can expect to pay between 1% and 3% of your income for disability insurance premiums.

For example, if your gross income is $5,000 per month, you can expect to pay between $50 and $150 per month for the premiums.

That’s a pretty wide spread, but that’s because disability insurance premiums depend on a large number of factors:

  • Your income. Generally, the higher your income, the higher your benefit will be in dollar terms, and higher your premium will be.
  • Your health. If you’re in excellent health, your premiums will be lower than if you have a chronic health condition.
  • The amount of income you hope to replace. For example, your premium will be lower if you’re looking to replace 50% of your pretax income than it will be if you want to go with 75%.
  • The waiting period. These can generally last anywhere from 30 days to 365 days, and it will represent the amount of time that will need to pass between the onset of your disability and receipt of benefits. The longer the waiting period, the lower your premium will be.
  • Your occupation. If you’re an accountant your premium will be lower than it would be if you were a truck driver or construction worker. That’s because the latter occupations are more hazardous and therefore more likely to result in a disability claim.
  • Your age. Though your likelihood of being disabled due to an injury declines with age, it increases for disabling illnesses. And since the vast majority of disability claims are related to illness, rather than injury, the premiums will increase with age.
  • Any optional coverage provisions you add to your policy.
  • “Own occupation” vs. “any occupation” classification in your policy – we’ll discuss this in the next question.
Is there anything I can do to reduce my premium?

Fortunately, there are several ways to lower your premium, though not all are within your immediate control:

Apply as early in life as possible. This is especially important when you apply for individual coverage.

If you’re getting group coverage from an employer, age isn’t a factor.

But on an individual policy, it will affect both the approval of the policy and the premium you’ll pay.

Choose a graded payment structure.

On most policies you’ll pay a level premium, in which your premium and benefit will remain fixed.

But some companies offer a graded payment option, in which your payments are lower early on, and gradually increase over time.

This can be a benefit to younger applicants, who may not have the financial ability early in life but will better be able to afford the higher premiums as their incomes grow. 

Apply before you become injured or develop a chronic illness.

Naturally, you’ll need to have a disability policy in place before an injury happens or a health condition develops.

Any injury or condition that’s considered to increase the likelihood of filing a disability claim will result in a higher premium, or even a policy declination.

Bundle with other insurance policies from the same company. 

Bundling discounts are more popular with other types of coverage, like auto and homeowner’s or renter’s insurance.

Not all insurance companies offer bundling discounts with disability insurance, but it’s always worth asking if it’s available.

Choose a longer waiting period. 

The waiting period – sometimes called the elimination period – is the equivalent of a deductible with health or auto insurance.

Except that with disability insurance, it’s a period of time. The longer it is, the lower your premium will be.

For example, a 180-day waiting period will have a significantly lower premium than a policy with a 90-day waiting period.

Annual premium payments. 

Most companies will give you a discount if you pay the entire premium upfront, rather than monthly or quarterly.

The discount may only be 5% or so, but every little bit helps. 

Shop, shop, shop!

This may be the single best strategy to get the lowest premium.

Never assume premiums are roughly the same between all companies. 

This is largely why we’re presenting several disability insurance companies and comparison sites in this guide.

How much disability insurance should I have?

This question is usually answered by the percentage of income you intend to replace with your disability policy.

Typically, you’ll be replacing about 60% of your before tax income with the policy. But it can be lower, and it can also be higher – often up to 80%.

Many policies also have a flat dollar limit on the monthly benefit. For example, you may have a $5,000 maximum monthly benefit.

If your monthly income is $10,000, you’ll only be replacing 50%.

If you’re going to be purchasing a policy that provides a flat dollar monthly benefit, you’ll need to determine if that amount will be sufficient to provide for your living expenses if you can no longer work in your current occupation.

The reduced percentage isn’t quite as scary as it sounds. 

First, it’s based on your gross income. Since taxes are probably eating up at least 20% of your pay, an 80% policy would fully replace your net income.

But 60% may work because you’ll also not have expenses related to your occupation, such as commuting or participating in continuing professional education.

You also might reasonably assume you’ll lower your cost of living in the aftermath of a disabling event. Crunch the numbers and determine the minimum amount of income you’ll need to live if you’re unable to work.

Whatever that number will be should be your starting point in choosing a monthly benefit.

What’s the difference between long-term disability and short-term disability?

As we discussed earlier, long-term disability policies come with a waiting or elimination period. This can range anywhere from 30 days to a full year.

During that time, you will not receive benefits under your long-term disability policy. And that’s where the short-term disability policy comes into play.

If you work for an employer who provides benefits, you’ll most likely have short-term disability through the company. If not, it may be worth considering getting a short-term policy.

But it all comes down to the length of the waiting period.

If it’s say, 90 days – which is typical – and you have sufficient liquid savings to cover your living expenses for that length of time, you probably don’t need a short-term disability policy.

If, however you don’t have liquid savings to survive during the waiting period, or if the waiting period is longer than 90 days, you may want to look into a short-term policy.

Short-term disability policies can be set up to match the waiting period on your long-term plan. Again, that can be anywhere from 30 days to one year. 

The typical coverage level is 80% of your gross monthly income, and premiums are comparable to those you’ll pay for long-term disability.

If I’m covered by a disability policy at work, why should I even consider getting an individual policy?

This is an important consideration, and there’s no hard and fast answer. Much depends on your occupation and the stability of employment.

For example, if you’re self-employed, a contractor, a freelancer, or a gig worker, you almost certainly don’t have an employer-sponsored long-term disability plan in place.

Individual long-term disability plans are most important for you if you are in one of these categories.

A second group however would be those who work in occupations where employment is uncertain. For example, let’s say you’re currently employed as a factory worker.

But if there are only three factories in your general vicinity – and you’re already working for one of them – there may be no job waiting for you should you be laid off.

That being the case, you may lose your disability coverage after termination. 

If you work in an occupation where employment is not necessarily stable, you may need to have your own disability policy. And as discussed earlier, that’s best obtained when you’re young and healthy.

At the opposite end of the spectrum, those who work in occupations where jobs are plentiful and likely to be quickly replaced even after termination may have less need for an individual disability policy.

The coverage that will be lost upon termination from one job can easily be replaced by coverage on the next.

What’s the difference between “own occupation” and “any occupation”?

This is one of the most critical distinctions with disability insurance. Under an own occupation policy, your benefits will be paid if you are unable to work in your current occupation.

For example, if you’re an airline pilot and a disability causes you to no longer be able to work in that capacity, the policy will pay you the agreed-upon benefit.

Under and any occupation policy, benefits will only be payable if you are unable to work in any occupation – not just your primary occupation.

For example, using the airline pilot example, if you’re able to work as a security guard, the policy would not pay benefits.

Obviously, an own occupation policy offers greater benefit payment potential. And for that reason, an own occupation policy will have a higher premium than an any occupation policy.

The obvious downside with and any occupation policy is that it will be extremely difficult to collect benefits.

If you were earning $100,000 in your own occupation, but you could work in some reduced capacity at $20,000 per year, the policy will not pay.

In most cases, and any occupation policy is a weak form of disability insurance.

What are common disability insurance policy exclusions?

Each insurance company will have its own list of disability insurance exclusions.

But common exclusions you can expect to find included will be disability that’s the result of:

  • Self-inflicted acts
  • Criminal activities
  • Acts of war
  • Civil disobedience or rebellion
  • Operating a vehicle while intoxicated or otherwise impaired
What are the tax consequences of disability insurance?

There’s good news and bad news on this front. First, the bad news. Disability insurance premiums are not tax-deductible.

And that leads to the good news – which is that disability benefits are not subject to income tax.

The two are connected. The benefits are not taxable precisely because the premiums paid to purchase them are not tax-deductible.

If you ever need to file a disability claim, this arrangement will almost certainly work in your favor.

Aren’t I covered by Social Security disability? And if so, why do I need a disability insurance policy?

The vast majority of American workers are covered for long-term disability under Social Security Disability Insurance, or SSDI for short.

However, the benefit provided by SSDI is no better than minimal. As of March, 2020, the average SSDI benefit is just $1,258 per month, or about $15,100 per year. 

A benefit at that level mostly benefits those at the lower end of the pay scale. But if you earn at least $30,000 per year, that benefit will cover no more than 50% of your gross income.

It’s extremely unlikely you’ll be able to cover your living expenses on a benefit that low.

Having your own long-term disability insurance is a way of guaranteeing you’ll have a higher income should you become disabled.

But there’s another factor that is equally important: SSDI is notoriously difficult to qualify for.

It’s entirely possible you may need legal representation and extensive documentation to prove your claim. It can also take months or even years to be awarded an SSDI benefit.

Even though those benefits may be paid retroactively, you may go many months without any income before the first check arrives.

Next Steps...

Unfortunately, disability insurance isn’t a type of insurance most people give much thought to.

It’s generally assumed you’ll be able to work right up until retirement, so disability might not be viewed as a priority. 

Cost is certainly another factor. 

Most budgets today are stretched pretty thin, and there’s little left over for yet another insurance policy. 

But ironically, disability is even more important if you’re in an occupation where you’re either likely to be injured or terminated.

That being the case, it’s worth it to make a little bit more room in your budget to cover the premium for long-term disability insurance.

And if you ever do experience a disabling event that zaps your income, you’ll look back and realize purchasing that disability policy may have been the single most important financial decision you’ve ever made.

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