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.
Guardian disability helps you protect a portion of your paycheck from unexpected illness and injury that keeps you from working. They specialize in providing the best long-term disability insurance.
Finding the best disability insurance company can be tricky, but we’ve compiled a list of the top options currently available to help you make the right decision.
Most people insure their homes and automobiles. But many fail to insure their most important financial asset: their paychecks.
Yet, a serious injury or illness, such as COVID-19 and all its variants, can keep you away from the job for weeks or months. Without protection, how will you be able to pay your bills?
That’s where disability insurance comes in. If you are unable to work for an extended period, you’ll need the help disability insurance provides.
It won’t cover everything you’ve lost, but it should give you peace of mind knowing that you can keep your finances on track.
Below we have listed the six best disability insurance companies you can work with to safeguard your income during any unforeseen work absences due to illness or injury.
Our Top Picks for Best Disability Insurance
Comparison of Disability Insurance Companies
Breeze is the easiest way to get disability insurance. No doctors visits, fully online and coverage in as little as 15 minutes. Because buying insurance should be simple.
Guardian disability helps you protect a portion of your paycheck from unexpected illness and injury that keeps you from working.
Protect your income against illness and injury. Compare long-term disability quotes from the best disability insurers from Policygenius.
Your employer may offer Assurity Disability Income Insurance as part of the benefits you can purchase at work.
Haven Disability is an affordable short term disability insurance policy issued by MassMutual.
Easily compare physician loans & physician disability insurance for doctors, dentists & medical professionals with LeverageRx.
There’s one other issue that’s a limiting factor when it comes to disability insurance, and that’s the lack of popular advertisement.
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.
6 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.
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.
Where indicated, we’ve provided the number of years you can expect to receive benefits under the policies offered by each provider.
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.
1. Breeze - Best Overall
Breeze is an easy online portal that will provide you with an affordable quote for some of the best disability insurance or critical illness insurance in less than 20 minutes. You can apply on your home computer, laptop, tablet, or phone.
Long-term disability policies pay recipients monthly benefits starting about one month after injury or illness and, depending on coverage, will continue doing so each month until you return to work or reach retirement age.
Payments are usually capped at between 60% and 80% of income.
Critical Illness coverage pays cancer, stroke, or heart attack patients a lump-sum benefit of up to $75,000.
Breeze does not currently offer short-term disability coverage.
2. Guardian - Best for Long-term Disability
Guardian Life offers disability insurance policy to provide a benefit term of up to 10 years or even all the way
up to retirement. Disability insurance policies often stop in just five years.
Policies are also. offered including standard features, like level premium, unemployment premium suspension,
occupational rehabilitation, and waiver of premium once your claim is in place.
Coverage must be purchased through agents operating out of nearly 60 agencies across the country. Disability policies are actually offered through Guardian Life’s subsidiary, Berkshire Life.
They provide both short-term and long-term disability policies, and you can even arrange a combination of both. And if you want additional coverage, you can also add supplementary disability insurance to the mix.
Age Range of Available Policies: Up to age 67
Monthly Benefit Amounts: Not indicated
Benefit Term: Up to 10 years, or all the way up to retirement.
Waiting Period: 30, 60, 90, 180, 360, or 720 days
Optional Policy Provisions: Partial disability, supplementary disability, future increase option, extended benefits, student loan protection, unemployment waiver of premium, cost-of-living adjustment.
3. Policygenius - Best Marketplace
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.
4. Assurity - Best for Employers
Based in Lincoln, Nebraska, Assurity is another long-term disability insurer with more than 100 years in business that provides companies and individuals disability coverage for short-term and long-term income replacement.
Assurity got its start as an insurer to woodworkers in the Midwest timber industry. So, it’s not averse to insuring people in more dangerous professions that many other companies won’t touch.
The company still uses many analog components to its long- and short-term disability insurance vetting processes. You must work with an agent and provide your detailed medical history before gaining coverage. So, it will likely take longer to get your policy than it would from online companies.
Speaking of companies, Assurity works with hundreds throughout the country to provide employee benefit programs. Some of these coverages include accident expense, hospital indemnity, life insurance, and disability income coverage.
Employers offer Assurity’s packages to their new hires. They explain the coverage possibilities and reasons employees should consider them. Assurity products protect employees when an injury, hospitalization, or critical illness forces them to lose income.
5. Haven Disability - Most Affordable
Haven Disability is a wholly-owned subsidiary of Mass Mutual Life Insurance, whose goal is to provide the best disability insurance by bringing digital solutions to the insurance industry.
Like some other companies on our list, Haven Life allows you to apply easily online and will immediately tell you if you qualify for one of their low-cost plans. They specialize in short-term disability income insurance, and their plans start at less than $10 per month.
In addition, you can file a claim online at any time. Once the application is approved, you will receive your first disbursement about one week after your exclusionary period. Coverage amounts range from $500 to $5,000 per month.
Options include how long you wish to receive benefits (up to one year), the length of your exclusionary period (two weeks, one month, or two months), and how often you want to get paid (once per month or once per year).
The approximate cost for a non-smoking, 45-year-old male who works in a professional industry to obtain $2,000 per month for six months is approximately $35 per month. That’s a much lower premium than other companies under the same circumstances.
6. LeverageRx - Best for Physicians
Here’s an insurance and finance brokerage house specifically for medical professionals. Any doctor will find the disability insurance coverage they need at a price they can afford using this online portal.
LeverageRx understands that doctors have unique skill sets, income potentials, and debt burdens that can be severely tested if an illness or injury were to occur.
Doctors often have higher standards of living than many professionals or laborers. And they have few options when it comes to replacing lost income.
As such, doctors should have an “own-occupation” rider as part of any long-term disability coverage.
This provides coverage if a doctor were to lose income from a specialty but could still work as a doctor in another capacity. For example, a surgeon is no longer able to perform surgeries, but could still do research or work as a general practitioner.
As might be expected, premiums are higher for this type of coverage. Monthly benefits will likely be higher as well to help offset the loss of more income.
What is Disability Insurance?
Disability insurance (disability insurance) is a policy that kicks in when a person is too sick or injured to work. It provides weekly, monthly, or yearly payments to the insured person while they are unable to work and draw an income.
It’s important to understand that disability insurance is not intended to provide all lost income during the compensation period. Most policies are designed to provide approximately 60% of lost wages.
The idea is to pay for monthly expenses, such as mortgages, car loans, and student loans, while other expenses are paid through savings.
Types of Disability Insurance
There are two general types of disability insurance: short-term, and long-term.
Disability insurance is often provided to employees through the companies for which they work, usually during the on-boarding process. But small business owners can also purchase disability insurance through private insurance companies to protect their incomes.
And individuals may want to consider additional disability insurance if they believe their company plans are insufficient for their needs.
Short-term Disability Insurance
The best disability insurance coverage on a short-term basis is the kind provided to those who will miss work for only a few weeks or months. Events covered include injuries, illnesses, or accidents.
It differs from worker’s compensation in that the event could have happened elsewhere than on the job, such as an automobile accident.
Most short-term plans begin to pay the monthly benefit within two weeks of the insured being off the job. Depending on the coverage, payments can last up to two years. Six months is the normal time frame.
Long-term Disability Insurance
More serious injuries or illnesses that might limit a person from never returning to work are covered under long-term plans.
They are costlier than short-term policies but also provide benefits for a far longer period. Some will pay each month for five or ten years. Others will pay until the insured reaches a specific age, such as 65 or 70. And a few will provide payments until the person passes away.
Before a long-term disability policy begins, an insured will often be allowed to use all short-term insurance benefits first. This gives the insured longer and faster protection.
Each short-term or long-term policy will offer you a variety of add-ons. In the insurance industry, these are called riders, and they help tailor your policy to you.
For example, you may want partial payment if you can work for a few hours per day, but not all day. Or you may wish to get paid if you can work a different type of job but can no longer work the one you had when sick or injured.
Those are specific details you’ll want to consider when researching various plans and companies. There are other riders as well. Talk to an insurance professional to learn more about which ones might be important for you.
Why Do You Need Disability Insurance?
Think of disability insurance as protection for your paycheck. We all think we’re going to live forever and never miss a day of work. But the truth is that a significant number of us will get sick or injured at least once during our working lives.
You might break your leg backpacking, hurt your back playing with the kids, or lay up in the hospital after a car wreck. You might get cancer or COVID-19. If any of these happen and you lose income for a prolonged period, will you be able to pay all your bills?
Like all insurance, disability insurance is a risk. You risk the monthly payment against remaining healthy. But if you get sick or injured, the risk will pay off in the form of cash payments to help you during difficult times.
We have told you about the benefits of disability insurance and its different kinds. We’ve also named our favorite private disability insurance companies.
Given all this information, look up one of them online, fill out the questionnaire, and find out what it would cost to insure against any loss of income.
You’ll be glad to have the information in hand to make a smart decision.
Disability Insurance FAQ's
Here are the answers to some oft-asked questions.
Disability insurance pays when illness and injury prevent someone from working and earning a living.
Disability insurance typically does not cover mental illness situations that prevent someone from working.
Frankly, it depends. If you get your disability insurance from work and your employer pays the premiums, it is taxable. If you pay the premiums (whether a work policy or a private policy), then it is generally not taxable.
That also depends. Most coverages are based on providing approximately 60% of your current salary. That’s thought to be enough to cover your take-home pay during the time off work.
There’s a wide range of potential costs, depending on several factors: the type of coverage, how much you need, how long you want to get paid, your current profession, your current health status, and your current age.
We’ve seen prices as low as $10 per month for young, healthy people and as much as $350 per month for older people. Physicians and others in more stressful jobs will likely pay more.
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
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.
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.
Breeze is the easiest way to get disability insurance. No doctors visits, fully online and coverage in as little as 15 minutes. Because buying insurance should be simple.
Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He and his wife are “empty nesters” living in New Hampshire.