How would you cover your monthly expenses if you were to fall ill or get hurt and couldn’t work? It’s something to think about when creating a comprehensive financial plan.

Purchasing your own policy can prove to be a prudent decision if your employer does not provide disability insurance. To identify the top disability insurance providers, we examined individual insurance policies.


What Is Disability Insurance?

Disability insurance is a kind of coverage that replaces a portion of your income in the event that an illness or injury prevents you from carrying out the essential tasks of your job.

Types of Disability Insurance

There are options for both short- and long-term disability insurance.


Short- and long-term disability insurance are probably provided if you receive it through your job. For information on the employer’s disability insurance, consult your benefits booklet or get in touch with your HR department.

In the event that you purchase a disability on your own:

  • The duration of short-term disability insurance is typically limited to one or three years.
  • Long-term impairment can persist for a long time. You can select whether the benefit lasts for a specific number of years (e.g., five or ten years) or until a specific age (e.g., “to age 65”).

Where to Buy Disability Insurance

People frequently obtain disability insurance through their jobs, but if workplace insurance isn’t an option for you, you can purchase individual disability insurance on your own. In particular, short-term disability insurance is primarily obtained through employment.

Individual long-term disability insurance policies make up the plans that have been rated above.

You must get in touch with an insurance agent who specializes in selling disability insurance from that specific company if you want to buy individual disability insurance from a private insurance provider. Look at the desired insurance company’s website; frequently, there will be a link that allows you to speak with an agent. Quotes are available online from certain disability insurance providers.

In certain circumstances, the government also offers disability insurance. The only way to be eligible for Social Security Disability Insurance (SSDI) is to have worked and made contributions to Social Security. If you are qualified for SSDI after becoming disabled, you will need to complete a lot of paperwork—many people find it difficult to understand—and wait a long time before receiving benefits if your application is accepted.

How Does Disability Insurance Work?

You pay monthly premiums after enrolling in an individual disability insurance plan. The insurance policy then pays a portion of your wages if you get sick or hurt and are unable to work. Pregnancy is usually covered under work-related disability insurance plans.

When receiving disability insurance through your job, you typically have the option to increase the benefit level at your own expense in addition to a basic plan that is covered by the employer.

When purchasing an individual disability insurance policy, you will typically be able to select the length of the benefit period as well as the elimination period, which is the amount of time you want to wait before receiving disability payments. Generally speaking, elimination periods range from 30 days to 365 days or, in the case of certain companies, up to 730 days (two years). You can lower your monthly premium payments by selecting a longer elimination period.

What Does Disability Insurance Cover?

Typically, disability insurance pays a fixed monthly amount for a predetermined amount of time after you start receiving benefits, or it covers a portion of your wages.

Find out what constitutes a “disability” from your HR department if you purchase disability insurance through your place of employment.

When purchasing a policy of individual disability insurance, it is crucial to review the meaning of “disability.” You can choose the definition of “disability” in individual disability insurance policies, and by purchasing a rider, you can upgrade to a more generous definition. The definition will have an impact on your eligibility for benefits. The terms “any occupation” and “own occupation” are commonly used to describe disabilities.

Any Occupation

In the event that an illness or injury keeps you from working in any capacity, you will be paid a monthly disability benefit. The most limited definition of a disability is this one.

For instance, you might be unable to perform the duties of your own job due to a shoulder injury, but you could still work at a desk for a comparable salary. Benefits under a “any occupation” disability insurance policy would not be available in this situation.

Own Occupation

The significant and tangible tasks required by your own line of work are beyond your capacity to complete. Certain policies for disability insurance will even cover the whole monthly benefit if you work for another company. The most permissive definition for receiving disability benefits is this one.

Find out if a “own occupation” rider is offered by your disability insurance agent and whether it enables you to continue receiving benefits even if you choose to take a different line of work.

What Does Disability Insurance Not Cover?

A disability policy will have a detailed list of exclusions, and among them will frequently be disabilities brought on by:

  • War
  • Pregnancy, except for complications from pregnancy
  • Committing a felony
  • Active participation in violence
  • Intentional, self-inflicted injury

Disabilities that develop while you’re incarcerated might also not be covered.

Are Disability Benefits Taxable?

Your possible tax liability for disability benefits is contingent upon the method of payment used to obtain the insurance.

  • Benefits from disability insurance are not taxable if you purchase it with after-tax money. For instance, your benefits won’t be taxed if you purchase individual disability insurance on your own.
  • Benefits from disability insurance that are covered by your employer are subject to taxes.
  • You might have to pay taxes on SSDI money if you have enough extra income.


We examined long-term disability insurance policies according to which ones offered the strongest benefits in order to determine which disability insurance providers were the best. The following criteria are used to determine ratings.

  • Maximum monthly benefit (25% of score): Higher scores were awarded to policies with higher maximum benefits.
  • Selections for the elimination period (25 percent of the score): Policies with shorter elimination periods were awarded higher points.
  • Age-based benefit period length (20% of score): Points were awarded for policies that offered benefits up to age 70.
  • Years of benefit period (20% of score): Points were awarded to policies that offered a 10-year benefit period option.
  • Online quotes (10% of score): If there are quotes for disability insurance available online, points are awarded.

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