Best Disability Insurance Providers and Coverage Options
If you experience a disabling condition or injury that prevents you from working, how will you and your family pay for your mortgage, utilities, groceries, and other daily living expenses? Disability insurance provides income replacement if you’ve been injured or have an illness leaving you unable to work. Your disabling condition may be long or short-term. Short-term disability insurance can cover you if you are disabled for only a short period of time (less than six months). Long-term disability insurance protects your income and helps you provide for your family for an extended period of time (longer than six months) should the unthinkable happen and you become permanently disabled.
About 61 million U.S. adults live with a disability.
Disability Insurance Policy Basics
Most disability insurance policies are similar and differ some with each provider. There are two basic types of disability insurance: Short-Term Disability (STD) and Long-Term Disability (LTD). The basic parts of a disability insurance policy include the following:
- Elimination period: This is the required time you must be disabled before you are able to make a claim and receive a benefit payment. Instead of paying a deductible as you would with auto/home insurance, you have a waiting or elimination period. The elimination period will vary based on the type of disability policy and the insurance provider.
- Occupation class: The occupation class is used by insurance underwriters to determine your insurance premium based on your occupation. Some occupations have higher risk factors than others and demand a higher insurance premium. Premium based on occupation class will vary by provider.
- Policy definitions: The policy definitions explain terms used in the policy, riders (additional coverage added to the policy by endorsement and a premium charge), and different disability classifications such as own occ (unable to perform duties of your actual job) or any occ (unable to perform duties of any job you are qualified to perform).
- Benefit amount: The amount of benefit you are entitled to receive if you have a claim is a certain percentage of your income. Depending on your stated, the disability benefit may be tax-free.
- Benefit length: The allowable benefit period is the amount of time you can expect to receive disability insurance payments. This will vary depending on your type of policy. Long-term disability can last until retirement age and short-term disability lasts for a shorter term, generally from a few months to a few years.
- Policy riders: A policy rider is a coverage that is added for an additional premium. Some common disability policy riders include Inflation Guard (protects your benefits against inflation), Mental Nervous (you can reduce your premium by limiting claims for a intellectual or nervous system condition), or Accident Medical Rider (adds coverage to pay for medical expenses caused by an accident). There are many more types of riders that will vary based on the type of disability policy you have and your insurance provider.
Don't forget to check elimination period options. The elimination period is the time between when the disabling condition begins and when the insurance company starts paying benefits.
Best Disability Insurance Providers
No one ever expects to need disability insurance but if that day does come, it pays to know your options. Here are some of the best providers of disability insurance on the market today. All of these companies have excellent financial strength ratings from insurance rating organizations such as A.M. Best.
Principal Financial Group has been in business since 1879 and has a financial strength rating of “A+ Superior" from A.M. Best. Principal disability income insurance is available in both long-term and short-term policies. Long-Term Disability insurance up to a maximum of $20,000 for both partial and total disability. The reasonable accommodation benefit pays for adjustments at your workplace to help you return to work. Accelerated pay is available if you have a terminal illness. Short-term disability insurance is available for both partial and total disability. Both short-term and long-term policies are available to employee groups. Policy riders are available for maternity coverage, survivor coverage, and non-work-related disabilities.
Guardian Life was founded in 1860 and has an “A++ Superior" rating from A.M. Best. Guardian offers five types of disability insurance: individual, short-term, long-term, supplemental, and group (through work). The Provider Plus option provides individual long-term disability insurance with a true “own occ” definition of total disability. You can choose benefit periods of two, five, or 10 years up to age 65 to 67 based on your occupational class. Student loan protection and disability benefit riders are available.
The Hartford was founded in 1810 and is rated “A” by A.M. Best. The Hartford provides disability insurance employers for both long-term and short-term disability insurance options. Long-term disability coverage through employer plans that offer vocational and rehabilitation resources, family care credit and a workplace modification benefit. Partial benefits are available for part-time employees who return to work. Short-term disability coverage through employer coverage pays benefits of up to $2,000 per week with no pre-existing conditions limitations. Active full and part-time employees are eligible for coverage. Support is available for emotional, legal, and financial issues with benefit specialists who can address medical care and claims questions. Support is provided at no extra cost to the employee or employer.
MetLife is known for its disability insurance plans and has an “A+ Superior" rating from A.M. Best. MetLife offers both short-term and long-term disability insurance policies. It offers three individual disability insurance plans:
- MetLife Income Guard: Coverage options for executives and medical professionals with benefits that are customizable
- OMNI Essentials: Broad income protection coverage that is customizable and ideal for policyholders on a budget. This coverage is not available in California
- Salary Saver-CA Only: A plan for consumers in CA for medical professionals and executives.
Policy riders are available to add coverage for hospital confinement benefits up to $500 per day. The Accident Medical Expense Rider pays $1,000 to $5,000 for any medical expenses following an accident, Return of Benefits Rider is an option to receive back unused premium, and the Social Insurance Supplement Rider pays additional benefits to the policyholder who is not eligible for workers compensation or social security benefits.
Assurity Life Insurance Company provides a variety of disability insurance plans in all states (New York policies are underwritten by Assurity Life Insurance Company of New York). The company has an “A++ Superior" rating from A.M. Best. Disability insurance through Assurity is guaranteed renewable to age 67 and benefits are provided for both partial and total disability. Limitations and exclusions may apply to policy benefits. Assurity's disability plans are available through both individual and group plans for employees. Benefit periods or are one, two, five, or 10 years up to ages 65 to 67. Home modification benefits, survivor benefits, and vocational rehabilitation benefits are built into the policy. Additional coverage can be added by policy rider for automatic benefit increase, catastrophic disability benefit, guaranteed insurability, and critical illness coverage.
Riversource has been in business since 1894 and has an “A+” financial stability rating from A.M. Best. Two income protection plans are available through RiverSource: Income Protection and Income Protection Plus. Both plans offer an income tax-free monthly benefit. Coverage is guaranteed up to age 65. A cost of living rider adds coverage to help protect you against cost-of-living increases.
Mutual of Omaha is one of the best-known names in insurance. The company is “A+ Superior" rated by A.M. Best. Mutual of Omaha offers both long-term and short-term disability insurance. The short-term policy is available for ages 18 to 61 with a $5,000 monthly maximum benefit and is guaranteed renewable through age 67. Coverage is available for most occupational classes and a policy rider can be added to extend the “own occ” policy definition for your benefit period. Long-term disability is available for ages 18 to 61 and guaranteed renewable to age 67 with a $12,000 maximum monthly benefit. Occupational benefit definitions can be extended by policy rider.
Ameritas Life Insurance Company has been in business since 1887 and has an “A Excellent" financial strength rating from A.M. Best. Ameritas offers long-term and short-term disability policies. Disability Income insurance benefit periods of two, five, or 10 years for ages 67 to 70 are available through Ameritas. Policies are guaranteed renewable and have a good health benefit built-in to the policy which reduces the elimination period by two days for every year you are claims-free. Other built-in benefits include waiver of premium with claim approval, surgical transplant after six months, cosmetic disability (disability due to elective procedure), and reimbursement for COBRA medical premiums if you become unemployed due to a disability. Riders are available for cost of living, catastrophic disability, future increase option, and enhanced disability if you still work at your job but have a reduced income due to an injury or illness.