Disability Insurance Finder

A disability that puts you out of work could be more debilitating than you’ve planned for. That’s where disability insurance comes in. It can protect your livelihood and replace a portion of your paycheck if you can’t work due to an illness or injury.

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Name	Product	Coverage Amount	Benefit period	Waiting period	Own Occupation	Medical exam required
Prudential disability insurance		Short-term: $100–$3,000 Long-term: $300–$6,000	Short-term: 3, 6 or 12 months Long-term: Up to ages 65, 67, or 70, or 2 or 5 years	Short-term: 30, 60 or 90 days Long-term: 90, 180 or 365 days	No	Yes	Go to site More Info	Compare	loading Fetching your data...
MassMutual disability insurance		Not listed	2, 5 or 10 years or up to age 65, 67 or 70	60, 90, 180, 365 or 730 days	Yes	Yes	Go to site More Info	Compare	loading Fetching your data...
Guardian disability insurance		$500 to $20,000	2, 5 and 10 years to age 65, 67 and 70	30, 60, 90, 180, 365 or 720 days	Yes	Yes	Go to site More Info	Compare	loading Fetching your data...
Principal disability insurance		$400 to $20,000	Up to ages 65, 67, or 70, or 2 or 5 years	30, 60, 90, 180 or 365 days	No info available	Yes	Go to site More Info	Compare	loading Fetching your data...
Mutual of Omaha disability insurance		Simplified issue: $300–$4,000 Short-term: $300–$5,000 Long-term: $300– $20,000	Simplified issue: 12, 24 or 36 months Short-term: 3, 6, 12 or 24 months Long-term: 2, 5, or 10 years, or to age 65 or 67	Simplified issue: 30 days (injury) or 90 days (sickness) Short-term: 0 (accident), 7, 14, 30, 60 or 90 days Long-term: 60, 90, 180 or 365 days	No info available	No	Go to site More Info	Compare	loading Fetching your data...

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What is disability insurance?

Disability insurance pays out a percentage of your salary if you’re unable to work due to a covered injury or illness. It replaces part of your paycheck for a specified period of time, and each insurer has a list of disabilities that qualify for benefits.

There are two types of coverage:

• Short-term disability insurance (STD) typically replaces 60% to 80% of your paycheck for three months to a year.
• Long-term disability insurance (LTD) usually replaces 40% to 60% of your paycheck for 2, 5 or 10 years, or until you retire.

How much is disability insurance?

Your premium will come down to your coverage amount, benefit and elimination period, occupation, health and where you live. To give you an idea of how much you might pay for coverage, the average cost of a long-term disability insurance policy is 1-3% of your annual salary. So, if you earn $65,000 a year, you might pay between $650 and $1,950 a year.

Is disability coverage worth it?

If you don’t have enough savings or funds to cover your daily living expenses for a few months, you might need disability insurance. But there may be some circumstances where disability insurance isn’t a necessary safety net in case you become disabled.

How does disability insurance work?

Short-term vs long-term disability insurance

The best type of policy for you depends on your financial situation. Short-term disability insurance can replace up to 80% of your salary, but the benefit period is limited. It’s best for those who don’t have an emergency savings fund to fall back on.

On the other hand, long-term disability insurance lasts several years or even until retirement, when Social Security steps in. The list of covered illnesses and injuries is far more comprehensive, and includes the likes of arthritis, back pain and heart disease. However, it’s usually more expensive, so factor that into your decision.

Short-term disability insurance typically pays 80% of your salary, and long-term disability insurance replaces around 60% of your income. While your salary is taxed, disability benefits aren’t — so the final amount can come pretty close to what you were taking home before your disability.

What qualifies for disability benefits?

It depends on your insurer, and the type of disability insurance coverage you have. But generally, these conditions are covered under each policy:

What happens if I’m disabled but can still work?

The answer lies in your insurer’s definition of disability and whether you can work at all. There are two types of plans:

• Own-occupation disability insurance pays out if you can’t work in your usual occupation, but you can work a different job.
• Any-occupation disability insurance pays benefits only if you can’t perform any job. To qualify, you’ll need to prove you don’t have the physical or mental capacity to work at all.

Which one should I pick?

Own-occupation policies are typically more helpful to people with physically demanding or high-paying jobs, such as doctors or dentists. Any-occupation policies mean you have to go down the list of possible careers and prove you can’t do any of them before the policy will pay out.

For example, say you make $200,000 as a doctor and your hand is damaged during a surgery you’re performing. An own-occupation policy would pay you around 60% of your salary until you could return to work. An any-occupation policy might not pay out if you could still work as a receptionist making $30,000.

Where can I get disability insurance?

If you’re sold on the idea of securing a “replacement paycheck” in the event you can no longer work, here’s how to go about it:

• Check for employer-sponsored coverage. In California, Hawaii, New Jersey, New York and Rhode Island, employers are legally required to offer short-term disability plans to their employees. If you live outside those states, it’s worth asking your workplace if STD is offered as part of your employee benefits.
• Buy an individual policy. You can purchase a policy directly from an insurance company. The major benefits of choosing this option are that the coverage is portable, and you’ll be able to customize your elimination and benefit periods to suit your financial situation. Just be sure to shop around to get the best possible rate.
• Go through a professional association. Some professional associations partner up with disability insurance companies to offer policies at discounted rates.

How do I save on disability insurance?

To cut down on your premium, you can:

• Increase your elimination period. All long-term disability policies have a waiting or elimination period. Basically, this is the time between the start of your disability and when the insurance company begins paying out your benefits. The shorter the waiting period, the more expensive the policy. If you choose a waiting period of 90 days or longer, you can save. However, in the meantime, you’ll need the savings to self-insure or put in place a short-term disability policy — which you may be able to get through your employer.
• Decrease your benefit period. The benefit period is the amount of time your policy will pay out benefits. The shorter the period, the cheaper the premium. The longest benefit you can get is until retirement age — for most carriers, that’s 67, though some can go up to age 70. The average disability lasts three years, so you might want to consider a benefit period of five or 10 years.
• Reduce your monthly benefit. The maximum monthly benefit most companies pay is between 60% and 70% of your current gross salary. If you think you can manage with less money, you can lower your monthly benefit, thereby lowering your premium. This can be a risky option, though, as disabilities can be costly.

What should I watch out for?

When purchasing your policy, you’ll want to make sure you fully understand your benefit options and exclusions before committing to a policy. Here are some things to keep an eye out for:

• Waiting period. Sometimes referred to as an elimination period, this is the amount of time you’ll have to be out of work before receiving your first disability check. Make sure you know how long you’d be able to go without your income before choosing a waiting period.
• Exclusions. Make sure you’re fully aware of any specific conditions or situations that won’t be covered. Also, you’ll want to know the amount of time you’ll have to wait before pre-existing conditions are covered.
• How to file your claim. Check with your potential insurance provider to see how exactly you would file a claim and what information you will have to keep to prove your disability.
• Denials and appeals. Talk with your disability provider to find out what happens if a claim is denied and what the appeal process involves.

Your legal rights under the ADA

What are the alternatives to disability insurance?

Disability insurance might be an option if your careers would be limited by a disability. However, it’s not right for everyone. You might instead rely on:

• Life insurance
• Workers’ comp
• Social Security Disability Insurance (SSDI)
• Self-insurance

Does life insurance cover disabilities?

Unfortunately not. Life insurance policies don’t cover disabilities, which means you won’t get a payout if you become fully, partially or temporarily disabled, unless you add a disability rider to your policy when you first purchase it.

Life insurance might be a better option for you if your family would be finacially devastated by your loss, moreso than if you became disabled. While disability can help replace your paycheck while you can’t work, life insurance could replace your paycheck for your family if you died.

Bottom line

Disability insurance pays benefits if you become disabled and can’t work, making it the truest form of income replacement. A policy can help you to cover your living and medical expenses until you’ve recovered from an injury or illness. You can choose between short-term and long-term coverage, which have different elimination and benefit periods — but neither will replace your entire paycheck.

Explore your options by comparing disability insurance companies.

Frequently asked questions about disability insurance

• Who needs disability insurance?

  You may want disability insurance if you’re in one of these situations:

  • You have dependents whose lives would be greatly affected by your disability
  • You don’t have substantial savings to replace lost income or
  • You don’t want to touch other savings if you can’t work
  • You have debt like a mortgage, student or personal loan
  • You need a backup childcare plan for stay-at-home parents

• Can I get coverage for multiple disabilities?

  For private disability insurance, your coverage may be affected by the types of disabilities you have and when you receive those disabilities. A few situations can happen:

  • You have both long- and short-term disabilities. Your policy should list specific conditions or criteria for conditions that qualify. Let’s say you suffer from both long- and short-term disabilities but only bought a long-term policy. Your insurance company will only pay out benefits based on the long-term disability.
  • Your conditions qualify as a disability when assessed together. Most Social Security disability applicants list multiple conditions that may not be disabling by themselves. But the conditions may qualify as a disability when put together or because minor ones exacerbate a more serious condition. Whether you’re filing for government or private benefits, you can list all disabilities you currently have to build a strong case for your claim.
  • You get diagnosed with a new disability while receiving benefits. This situation involves many factors, such as when the benefits end for your previous disability, whether the disabilities are related and your insurance policy agreement. Insurers will likely assess the new disability on a case-by-case basis. Be prepared to give a strong argument and medical evidence that you qualify for further benefits.

• Do states offer disability insurance?

  Only a few states offer government-run disability benefits, including California, Hawaii, New Jersey, New York, and Rhode Island. These states offer partial replacement income for illness, injuries, pregnancy complications or recovery from childbirth.

  You might compare your eligibility, potential payouts and the illnesses covered from your state program before forgoing a private disability policy.

• What's not covered by disability insurance?

  The exclusions can vary by insurer, but look at your policy for these common exclusions or limitations:

  • Pre-existing conditions
  • Conditions caused by mental or nervous issues
  • Conditions caused by substance abuse, including prescription drugs
  • Normal pregnancy
  • Workplace injuries
  • Intentional injuries
  • War or acts of war