Best Disability Insurance Companies

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.

Group plans

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.

Individual coverage

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.

Elimination period

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.

Locked-in premiums

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.

Long-term 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.

Short-term insurance

This coverage works best for injured or sick people who can go back to work within 30 days up to two years.

Governmental insurance

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.

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.