Disability insurance allows workers who are unable to work for an extended period of time to receive a percentage of their income so they can support themselves. Depending on the disability, individuals may opt for short-term or long-term disability.
Many employers offer group disability plans, which can be less expensive than individual coverage. Individual coverage can supplement group insurance, or it can be used by individuals who do not have an employee group disability plan option. Governmental insurance is also available, although not everyone will qualify.
Top 10 Best Rated Disability Insurance Providers
Social Security Disability is a government program that protects plan holders' income should they lose the ability to earn. The program is run by the Social Security Administration, which is now more than 80 years old.
|Read 203 Reviews|
Colonial Life & Accident Insurance Co. is an insurance company headquartered in Columbia, South Carolina. Founded in 1939, the company offers consumers disability insurance for when they are injured or sick.
|Read 70 Reviews|
Unum Insurance Company is an insurance company that was founded in 1848. The company is considered to be the leading provider of group disability benefits in the United States.
|Read 260 Reviews|
Aflac is a large insurance company that offers a range of insurance policies, from life insurance to dental insurance. The company also offers short-term disability insurance, which pays benefits when a person is unable to work.
|Read 396 Reviews|
Mutual of Omaha is a large insurance and financial services company located in Omaha, Nebraska. The company offers a selection of disability insurance plans, including accident-only plans and accident and sickness plans.
|Read 27 Reviews|
Aetna is one of America's largest insurance providers. The company offers individual disability insurance plans, and they can cover lost income for weeks or months when a consumer is not able to work due to injury or illness.
|Read 120 Reviews|
The Hartford is one America's oldest insurance companies, founded in 1810 in Hartford, CT. Today, the company offers a range of disability insurance policies, including long term and short term disability insurance.
|Read 235 Reviews|
Liberty Mutual is one of America's biggest insurance companies, founded in 1912 and headquartered in Boston, Massachusetts. The company offers group disability plans that employers can provide employees.
|Read 146 Reviews|
Headquartered in New York, NY, MetLife is a company that is known for offering life insurance. MetLife also offers disability insurance, which consumers can purchase via their employer or through an individual plan.
|Read 243 Reviews|
Matrix Absence Management is a company that works with employers to provide people with disability insurance should they be unable to work. The company is a member of the Tokio Marine Group, and they are headquartered in Phoenix.
|Read 77 Reviews|
What features matter most?
Cash benefit based on salary
Most types of disability insurance offer cash benefits based on how much salary policyholders would ordinarily receive if they were still able to work. These cash benefits allow users to continue supporting themselves and their families while they are unable to work.
- Group short-term disability plans typically cover about 60% of regular salary: For every $100 the consumer usually makes, he or she will probably get about $60 via disability insurance. This money can help pay bills or buy food while the employee is unable to work.
- Individual coverages may be higher: Users can purchase supplemental insurance to get up to $70 or $80 per every $100 they would normally earn, for instance.
- Inflation riders: Users can purchase a rider for a small increase in premium that will increase their benefits each year, based on the rate of inflation.
- Residual or partial payouts: A rider can be purchased on certain disability insurance policies that allow you to return to work part-time, receive partial salary and still receive payouts from your policy.
- Individual factors in price: Besides how much salary a person earns, other factors that determine the price of disability insurance include: age, sex, current health condition, bad habits like smoking and type of job.
Benefit time period
Consumers can choose from two major types of disability insurance: short term and long term. Within each of these types, they can pick from varying lengths of coverage, with longer lengths generally costing more.
- Short-term coverage: Short-term coverage is offered by many employers as a benefit; it allows for workers to collect disability benefits for a limited period of time, ranging from 30 days to two years.
- Long-term coverage: Users who are permanently disabled or who are unable to work for longer than a year may need to rely on long-term coverage, which can last from 2 to 10 years, or for the rest of the insured’s lifetime.
- Until retirement age: Users can elect to stop coverage once they reach retirement age. This often makes sense, as Social Security and other retirement benefits should begin to apply.
Many employers offer group disability plans as a benefit of employment. These plans are purchased by employers at a discounted rate and are often cheaper for employees to sign up for than individual disability insurance. They typically include short-term disability coverage.
- Pay up to 60% of salary: These plans typically cover up to 60 percent of the user's salary in the event of disability.
- Often time- and benefit-limited: Group plans tend to offer short-term coverage, often lasting from 30 days to two years, although some employers may offer long-term policies. Payout benefits may not be as high as consumers could purchase on an individual basis.
- Lower premiums: Users pay typically less premium each month for employer-sponsored insurance, and often payments are deducted automatically from pre-tax pay.
In addition to group insurance, most disability insurance companies offer individual disability insurance. It can serve as supplemental insurance that offers additional benefits on top of employer-sponsored insurance, especially for providing longer benefit periods, or it can serve as stand-alone disability coverage.
- Pay higher benefits: Individual insurance plans may offer benefits of as high as 80 percent of the user's base salary.
- May be longer duration: Individual disability insurance can be used to provide a longer-term coverage than group plans.
- Higher premiums: Individual supplements are generally more expensive than group plans.
The elimination period is the amount of time users have to wait after a disability begins before they can begin collecting benefits. Different insurance plans offer different elimination periods; longer periods translate to lower premiums, but policyholders must be certain they can afford to wait for benefits to kick in.
- Standard elimination period: Employer-sponsored short-term disability plans can have an elimination period of zero to 14 days. Long-term disability insurance can have elimination periods from 30 days to one year.
- Payment after elimination period: Something to be aware of is that individual disability policies commonly send monthly payments to insureds at the end of the month. So the first payment after a month-long elimination period would not reach a person until after the second month post-disability.
- Lengthy elimination period: The longer the elimination period, the less expensive monthly premiums are, but users will have to wait longer before insurance kicks in after suffering a disability.
Users can sometimes purchase disability insurance that has a locked-in premium, meaning the premium amount doesn't change regardless of economic conditions. It is often called non cancelable coverage.
- Users pay same premium year after year: Locked-in premiums allow users to continue to pay the same amount over the course of years, making financial planning easier.
- Installment vs. lump sum: Users may need to pay the same amount monthly or may be able to make one annual payment to get coverage.
- Guaranteed renewable: Another option similar to non cancelable coverage is a policy that guarantees you can get the same benefits from the same insurance company every year. With this approach, however, the insurance carrier can raise your premiums in certain circumstances.
- Return and waiver of premiums: Consumers can add additional features to a policy that will require insurance companies to return premiums if no claim has been made after a specific period of time, as well as waive further premium payments if an individual has been disabled for more than 90 days.
What are different types of Disability Insurance?
Long-term disability insurance covers people who are disabled and unable to work for a longer period of time. This type of insurance has longer time limits – from two years to a lifetime – so users don't have to worry about benefits running out if they are disabled for more than 90 days.
This coverage works best for injured or sick people who can go back to work within 30 days up to two years.
The government of the United States offers disability insurance in the form of Social Security payments. There is a lengthy application process for this type of insurance.
Own occupation insurance
Own occupation insurance covers people who are unable to perform their normal job duties because of a disabling condition.
Any occupation insurance
Any occupation insurance requires users to prove that they are unable to work at any job prior to receiving benefits.
Who's it for?
People who have been injured
Serious injuries may leave people unable to work for a period of time.
People who are recovering from surgery
Often, people are limited in their activities following surgeries. They may be bed-ridden or required to receive therapy, or they may not be allowed to lift heavy objects or drive for a period of time following surgery.
People who have a chronic condition
People with a heart condition, asthma or other life-threatening condition may not be able to work for a period of time or may not be able to fully perform job duties because of restrictions on their activity levels.
People who cannot work at all
People who have severe injuries, illnesses or other disabilities may not be able to work for the rest of their lives and need disability insurance to help them support themselves and their families.
Aflac is one of the best known American insurance companies. It offers various types of insurance, including disability insurance.
- Best for People who have been injured, people recovering from surgery and people with a chronic condition.
The Hartford offers a number of insurance options, including disability insurance. It offers a large number of options and unusual benefits. such as face-to-face or telephone counseling.
- Best for People who have been injured, people recovering from surgery,, people with a chronic condition and people who cannot work at all.
Liberty Mutual has been providing a variety of insurance coverages to individuals since 1912. It is currently the third largest property and casualty insurance provider in the United States.
- Best for People who have been injured, people recovering from surgery and people with a chronic condition.
Unum is one of the oldest insurance companies in the United States, having first offered insurance prior to the Civil War. It became the first disability insurance provider in the United States in 1939.
- Best for People who have been injured and people recovering from surgery.
Prudential has been offering insurance for over 140 years. It currently has offices in Asia and Europe as well as in both North and South America.
- Best for People with a chronic condition.
MassMutual has been offering insurance since 1851. It is a mutually funded insurance company, which means that consumers are considered shareholders and are eligible to vote for the Board of Directors and/or receive dividends.
- Best for People recovering from surgery, people who have been injured and people with a chronic condition.
MetLife is a well-known insurance company that has become famous for its commercials using characters from the "Peanuts" comic strip. It offers a variety of insurances, including disability insurance.
- Best for People with chronic conditions, people who have been injured and people recovering from surgery.
Mutual of Omaha is a mutually funded insurance company headquartered in Nebraska. It offers insurance in almost every state via its 4,900 associates.
- Best for People who have been injured and people who are recovering from surgery.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
11 – 15 Best Rated Disability Insurance Providers
Cigna offers short-term disability insurance plans to employers and employees. The company is headquartered in Bloomfield, CT, and they have been offering insurance solutions since 1982.
|Read 181 Reviews|
Assurant, founded in 1892, provides niche-market insurance solutions, including health, life, property insurance and more. The company offers payment protection to individuals, should they lose their ability to earn.
|Read 406 Reviews|
The Standard Insurance Company offers individual disability insurance plans to consumers. The company has three disability insurance plan options, including Protector Platinum, Protector+ and Protector Essential.
|Read 43 Reviews|
Prudential is a large insurance and financial services company, and they offer customers a range of products, including life insurance and retirement accounts. The company offers group disability insurance plans for employers.
|Read 71 Reviews|
Headquartered in Springfield, MA, MassMutual Financial Group is a company that was founded in 1851. The company offers individuals disability income insurance to protect their income should they experience an inability to work.