Disability insurance is one of the most misunderstood insurance plans out there.
A lot of people who need disability insurance don’t have it.
If something were to happen to you while you’re at work, worker’s compensation could help replace your paycheck, but what happens if you’re injured at home or when you’re not working?
This is where your disability insurance is going to come in.
Let’s go through a hypothetical situation:
You’re helping a friend move furniture on the weekend. You’re helping move the couch when you take a little tumble down the stairs. Ouch! You end up with a bad back injury and you can’t go to work for months.
Workers compensation isn’t going to help because the injury didn’t happen at work. What are you going to do for a paycheck?
If you have a disability insurance policy, it can replace your lost wages.
Because short-term insurance is usually provided by employers, this list focuses on companies who sell long-term insurance plans.
- Comprehensive group and individual short- and long-term disability insurance policies
- Total and partial disability policies
- A large selection of features and riders available on most plans
- Accident-only disability and critical illness insurance also available
- Only offers disability income insurance or supplemental disability insurance
- No medical examination or income documentation required for coverage
- Guaranteed-renewable policies with level premiums
- Premiums based on a percentage of the policyholder's manual duties
- Standard policies at discounted, unisex rates
- Replaces a percentage of the policyholder's base salary and bonus or incentive income
- Protects from 40% to 60% of the base salary after taxes
- Covers retirement contributions and student loan repayments
- Tax-free benefits for those who pay their policy with after-tax dollars
- Individual disability insurance coverage remains in place even after changing jobs
- Supplemental disability income and disability insurance for business owners available
- Flexible coverages can be customized through several benefit terms and optional riders
- Leading provider of voluntary supplemental insurances in the US
- Group short-term disability insurance
- Guaranteed renewable up to age 75
- No medical questions asked in some states
- Individual accident, cancer, and critical illness insurance also available
Deciding on the Best Type of Disability Insurance Policy
According to a recent OneAmerica Survey, just a third of Americans have disability coverage through their workplace, which is problematic because this type of insurance can provide critical financial aid in trying times.
If you find yourself needing disability insurance, the first place you need to start is establishing the best type of policy for your needs.
Browse different rates from several carriers if you already know what you want.
As you go about comparing companies, you should not only take into consideration a company’s rates, but also their financial standing.
Some of the insurance carriers listed below will also sell short-term policies, but the goal of this list is to provide you with the best long-term insurance companies out there.
Another important note on our list is everyone is different, meaning each person has different needs.
One company might be perfect for one applicant, but terrible for another. You’ll need to comb through the list to find the perfect match for you.
There were dozens of factors we considered when putting this list together. We wanted to look at every angle to help give you the best options including: Price, Options, Customer service, Financial standing, Company history
Our Top 10 Best Disability Insurance Companies For 2019
Insurance providers are reviewed by credit rating agencies like A.M. Best, Moody’s, Fitch, and Standard & Poor to assess their likelihood to meet their credit obligations.
Each of the companies on this list are respected and have received high marks for the major credit agencies, meaning you can count on them to pay out your disability policy as promised.
They have a couple of different choices for disability insurance, one of those is an individual disability insurance policy and a simplified disability insurance.
One reason Assurity stands out from the competition is because of their disability insurance for self-employed applicants.
If you own your business or you’re self-employed, then Assurity is an excellent choice for anyone looking for individual disability policy.
Their Simplified Disability Income Insurance plan can give you disability insurance without having to jump through all of the hoops. All you’ll have to do is do a phone interview, and they will do a prescription database check and a MIB check.
Their simplified plan is open to anyone from the ages of 18 to 59 and can give you protection for up to $3,000.
For most people, this should be enough coverage, but if you need more, you’ll have to go with a more in-depth policy.
2. Guardian Life
Guardian was established in 1860, and they have the best rating from both A.M. Best and the BBB.
Not only do they have great ratings, but they are also a Fortune 250 global financial services company.
Guardian Life is no small operation. They have over 2,750 agents and 58 agencies across the nation. More than likely there is an agency near you.
Before you go shopping, you should know the disability insurance plans are actually offered by one of their subsidiaries, Berkshire Life Insurance Company of America.
Berkshire Life has four kinds of disability policies:
- an individual plan
- a group plan
- disability insurance for business owners, and
- a supplemental plan
We are going to focus on their ProVider Plus plan, which is their individual long-term disability policy. You can get coverage for 2 to 10 years and up until you’re 67.
This plan is a true own occupation, meaning as long as you can’t perform YOUR job, you can make a claim on the plan, even if you could do another job.
3. Illinois Mutual
You may not have heard of Illinois Mutual before, but you need to include them in your search for disability coverage. As you can guess from the name, they were established in Peoria, Illinois over 100 years ago.
Now, they have over 1,000 independent insurance agents across the country.
Their Paycheck Power disability insurance policy can help pay for your monthly expenses if Social Security isn’t enough. Like most other plans, their policy is guaranteed renewable until you turn 67. As long as you’re paying the premiums, they can’t cancel your policy.
Illinois Mutual also offers a disability product targeting business owners. Their Business Expense Power plan gives disability insurance coverage to company owners. If something were to happen to you, would your business shut down?
This plan will give the company the money to pay for any business expenses to get the doors open and everything running smoothly.
4. PIU (Petersen International Underwriters)
Petersen International Underwriters is probably the least well-known company on our list, but you shouldn’t overlook them for disability insurance. PIU has a noble history.
The idea for the company was born when W. Harold Petersen was a boy and his father was suffering from a condition which prevented him from working for years.
PIU excels in providing disability insurance for high-income earners. They specialize in working with clients who would lose a lot of income if they could no longer work.
Another category where PIU shines is with clients who already have a health condition when they apply.
Sure, the rates may not be the lowest, but PIU gives disability policies where other companies won’t.
MassMutual is not new to the insurance market. They’ve been in operation since 1851; over 160 years of selling insurance.
Not only have they been around for 100 years, but they also have quality ratings. They hold an A+ from both A.M. Best and from the BBB.
Some of the basics of their coverage are they have elimination periods in everything from 60 days to 730 days. Benefit periods from 2 years to 10 years, with a maximum age of 70.
They define disability as own occupation, meaning you are too injured to do your job, not just any job. With MassMutual, you can get a True Own Occupation rider which changes the qualifications for paying out the plan.
A unique factor of MassMutual plans is the recurring disability feature. If you end up with a new disability which is related to a previous claim, the elimination period is waived.
6. Mutual of Omaha
Mutual of Omaha has been featured on Good Financial Cents several times, and with good reason. What makes Mutual of Omaha so special? It’s the additional benefits and riders.
They have a handful of different benefits built-in to their plans and others you can add on to your policy if you want more coverage.
Their long-term disability insurance policies have a total disability income benefit, a waiver of premium rider, a proportionate disability benefit, and they are guaranteed renewable until you turn 67.
After 67, you can still get coverage up until 75 if you’re still working full-time.
These are only a few of the built-in features. Their plan also has:
- Terminal illness benefit
- Rehabilitation benefit
- Survivor benefit
- Some of the additional riders you can add are:
- Cost-of-living adjustment rider
- Critical illness benefit
- Return of premium
If you’re looking for a company which has a customizable plan, Mutual of Omaha is an excellent option.
7. Ohio National
To get started, let’s look at Ohio National’s ratings.
They have an A+ rating from both A.M. Best, the BBB, and the S&P. It’s comforting to know these third-party rating companies have deemed Ohio National a financially safe provider.
One of the main factors which went into our list is customer service. If you look at reviews on Ohio National, you’ll see a lot of policyholders talking about their stellar customer service representatives.
Let’s look at Ohio National’s ContinuOn Income Solutions policy.
It’s a long-term disability insurance policy available to anyone from the ages of 18-70. It’s non-cancelable and guaranteed renewable. They have elimination periods anywhere from 60 days to 365 days and the minimum income benefits of up to $30,000.
In addition to the basic income protection, their plan also has some additional benefits, like a residual rider, which can payout a portion of the policy if you can still work but have a loss of income.
They also have a Hospice care benefit, if the policyholder is disabled, the elimination period is waived if they receive hospice benefits.
8. Principal Financial Group
Principal’s history goes all the way back to 1879. They’ve bene around for a while, and they’ve had a long time to perfect their products and services.
They have received a handful of awards, including the Adviser’s Choice Award for advisor support.
Principal’s Individual disability income insurance is available as both an individual plan and as an employee benefit.
One unique feature of these policies is they are available to workers who work at least 20 hours. Other companies are going to have stricter restrictions on their disability policies.
With Principal, you get simplified underwriting for up to $6,000 a month. If you want to secure more protection than that, you’ll have to go through the full underwriting.
Every applicant is different, and each person is going to receive different rates, but Principal gives some enticing sample quotes for a $1,000 a month policy. If you’re a 40-year-old male looking to buy the policy, you’re going to pay around $25 a month.
A woman of the same age and health is going to pay close to $40. These are excellent rates for this amount of protection.
9. The Standard
If you’re looking for options, The Standard has you covered.
They have several choices for you to pick from. When looking at disability insurance, they have three standard options, Platinum Advantage, Protector Platinum, and the Protector Essential.
Let’s examine their Platinum Advantage policy. One thing which makes it stand out from the crows is the no-cost riders and benefits:
One of those is the Family Care Benefit. If you ever have to take care of a family member with a serious illness, you can get a monthly benefit of 20% of your income. This is a benefit you won’t find anywhere else.
Some of the other riders they include in this policy is an automatic increase rider and a benefit increase rider. The automatic increase rider will increase the monthly benefit 4% every year for the first six years.
The benefit increase rider allows you to buy more coverage for the first three years after buying your plan without having to go through the underwriting again.
Ameritas was originally established in 1887 under a different name, the Old Line Bankers Life Company of Nebraska. They merged with Acacia Life and Union Central Mutual Holding Company of Cincinnati, Ohio. After the two mergers, the company became known as Ameritas.
Ameritas sells two types of disability insurance:
- DInamic Foundation
- DInamic Fundamental
The DInamic Foundation plan has several features built-in to the policy which you can enjoy. One of the most notable is the non-disability injury feature, which will reimburse medical expenses.
Another unique aspect of the plan is the COBRA Premiums benefit, which will reimburse your premiums if you lose health insurance coverage because of your disability.
The other option, the DInamic Fundamental is similar to the Foundation policy, but it has a simplified underwriting process, which makes it easier and quicker to get approved for.
If you want to be eligible for the Fundamental policy, you must work at least 30 hours a week and not have a high-risk job.
Long Term vs. Short Term Disability Insurance
There are two main types of disability insurance, short-term and long-term. You can probably guess the difference based on the names, but you need to know the exact coverage differences.
- Short-term insurance is built to replace your paycheck for the first couple weeks or months after your injury. These policies are usually offered by employers.
- Long-term is designed to jump in after the short-term insurance policy ends. Long-term plans are there to ensure you have the income to pay for your mortgage, groceries, and other bills if you’re out of work for months or even years.
Long-term is going to be more expensive because of the amount of coverage it can provide.
You may not think you need a long-term insurance policy, but based on numbers from the Social Security Administration, more than 1 in 4 workers who are 20-years-old will be out of work for 90 days or more because of a disability.
Buying The Best Disability Insurance For You
These are only a few of the thousands of companies on the market.
Each insurance carrier is different, and each of them is going to offer you different protect. You need to find the best plan and provider for your needs.
We hope nothing happens to you, but you never know.
Before you purchase a plan, you need to shop around.
You won’t know which company has the best plan until you compare the options. Sure, you can spend all of your time researching companies or calling agents, but we’ve spent the time to review a lot of companies.
Feel free to keep poking around to find a company who will offer you quality and affordable disability insurance.