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A Guide To Disability Insurance and Top Disability Insurance Companies in the US

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While no one hopes to become disabled, preparing for it will help to make things easier if it eventually happens. Disability insurance is the perfect insurance to keep you covered in the eventuality that you become disabled.

Statistics from the Council for Disability Awareness have shown that there is an increase in the likelihood of people becoming disabled before retirement due to illness or injury.

The statistics show that 5.6 percent of working Americans will experience short-term disability (less than six months) due to injury, illness or pregnancy while 20-year-old workers have 1-in-4 chance of becoming disabled before retirement.

Worse still, less than 50 percent of American adults claim to have enough savings in case a disabling condition puts them out of work. As the likelihood of becoming disabled due to injury, illness or pregnancy increases, it is important that you get disability insurance to give you coverage and provide you with the right benefits.

What is Disability Insurance?

Disability Insurance is a type of insurance that replaces the earned income of the beneficiary in the event that they are unable to work due to a disability.

This type of insurance isn’t actually for sick people or already disabled people but for those who want to protect their income and still earn even if a disability prevents them from getting a job or continuing their previous job.

Disability insurance is much better than relying on a savings account. This is because you can never save as much as you would really need to have in the event that you become disabled, but with disability insurance, the provider will be able to offer you the best insurance terms that will cover any possible disability you would have, whether or not it completely stops from your working.

How Disability Insurance Works

Before signing up for disability insurance, it is important you first know how it works.

Disability insurance only covers non-work related accidents, injury, and illnesses, Therefore you will only get benefits if you become disabled anywhere away from your workplace. The insurance will cover your time off work and provide you with enough benefits to cover the day-to-day expenses while you’re recovering.

Disability insurance also covers maternity leave. One type of disability insurance – short term disability is targeted towards expectant mothers. It gives the woman enough time to bond with her child, heal and adjust to the new situation without her having to worry about the increasing lack of pay during the period. 

Forms of Disability Insurance

There are two forms of disability insurance that is just right to meet the needs of every individual regardless of their disability.

Short-Term Disability Insurance

Short-term disability insurance also called temporary disability insurance is a form of insurance which provides income protection for workers temporarily unable to work due to a disability.

The benefits offered by this form of disability insurance will depend on the policies of the insurance provider and the occupation of the beneficiary.

The period of time of inactivity allowed in this insurance policy is usually three to six months (90 – 180 days), anything longer would then be referred to as long-term disability insurance.

Short-term disability insurance is usually utilized for disabilities caused by injury or pregnancy (maternity leave), however, it can also cover some illness-related issues.

This form of insurance typically provides about 60 percent of your gross income during the period which should be enough to cover all your daily expenses.

Long-Term Disability Insurance

Long-term disability insurance is offered to individuals who would want to be insured for a period longer than six months (180 days). This form of insurance provides income protection for workers unable to work for longer time periods due to a disability.

The insurance terms of this form of disability insurance vary and would depend on the insurance provider. Some providers would continue to pay benefits for a period between two to 10 years while others will continue to do so until the beneficiary reaches age 65.

If the beneficiary is engaged in one job or the other at age 65, some providers will continue to provide benefits to the beneficiary.

Long-term disability insurance typically covers up to 60 percent of the beneficiary’s gross income.

Just like short-term disability insurance, long-term disability insurance does not cover work-related accidents or injuries. Especially those injuries and accidents covered by worker’s compensation insurance. They only cover personal accidents and injuries of the workplace.

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Individual Vs Group disability insurance

There is really not much difference between the two except that beneficiaries of group disability insurance are most likely to qualify for lower premiums.

Group Disability Insurance

This refers to disability insurance offered by providers to beneficiaries through their employers. Due to their employers’ high bargaining power, the insurance policy would carry lower premiums. Group disability insurance is offered through employers and professional associations and the policies would depend on the provider.

Some providers would offer coverage up to age 75 for full-time workers while others could opt for age 65. 

Individual Disability Insurance

Freelancers and entrepreneurs who do not work under companies and are not members of professional associations can opt for individual disability insurance. Also, employees whose employers do not offer group disability insurance can also go for individual disability insurance.

The downside of going for this type is that insurance providers usually impose higher premiums on the beneficiaries 

Disability Insurance Providers

There are two main types of disability insurance providers – private companies and the government.

The US government provides disability insurance for all citizens, however, its insurance coverage might not be enough for most people to cover their daily expenses during the recovery period or till their retirement for long-term insurance disability.

This is why some people opt for private companies which are more flexible with terms and less strict in the acceptance of proposals.

The US government’s disability insurance program is known as the Social Security (SS) which offers Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) to beneficiaries.

Social Security Benefits (SS)

The U.S Social Security Administration offers Social Security disability programs to people are unable to work due to a disability. Social Security offers two disability financing programs – Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

Social Security is the first choice for many people with a disability, however, its eligibility requirements are quite tough and sometimes the disability benefits are not sufficient to get by day-to-day expenses.

One requirement is that your condition should exceed one year or expect to result in death for you to be qualified for Social Security disability benefits.

However, Social Security still remains the best choice for people that are uninsured or underinsured.

Social Security Disability Insurance (SSDI)

Social Security Disability Insurance offers monthly benefits to people who are unable to work due to a disability. This disability program is only for those who have worked for a long period of time and paid Social Security taxes, however, most people would find it difficult to qualify for this program even if they meet the working and tax payment requirements.

This is because the Social Security Act defines disability very strictly so you would have to be severely impaired to qualify.

As of 2018, Social Security Disability Insurance benefits average $1,321.60 monthly for men and $1,071.64 monthly for women.  In 2019, the average disability benefits were about $1,234 for both genders. 

How to Qualify For Social Security Disability Insurance

Social Security Disability Insurance program is for those who have worked for a long period of time before becoming disabled. The longer you’ve worked, the higher the chances of you being qualified to receive the benefits. For those who haven’t worked long enough, they would have to opt for Supplemental Security Income (SSI) instead.

Disability Eligibility

Not just any disability will qualify for this insurance program, so you would have to check through the Social Security’s definition of disability and go through their list of impairments to see if your disability is qualified for Social Security benefits.

Social security usually accepts individuals that are severely impaired even though their disability is not listed. However, your disability must prevent you from doing the work you were doing before you become disabled or prevent you from doing any other work. The same goes for people who their disability in the list of impairments.

Work credits

You will need a number of credits before you’ll be considered for this type of disability benefits. The number of work credits will depend on how old you were when you became disabled. Your work credits will determine if you are eligible for Social Security Disability Insurance or not.

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Your work credits are actually your earnings. Presently, $5,440 should get you a maximum of four credits for a year. If you are able to earn that for 10 years before you become disabled, you’ll have 40 work credits. Normally, someone who got disabled at age 50 would need 28 work credits to qualify, so you should get your benefits easily if are not yet 50 years old.

How to Apply For Social Security Disability Insurance

You can apply for social security benefits online or visit your local social security office. It is advised that you call ahead to make an appointment as it would reduce the time you spend waiting to apply.

For those who wish to apply to apply online, you can start your online application here

Supplemental Security Income (SSI)

Supplemental Security Income is an option for those who are not qualified for Social Security Disability Insurance (those who have not worked for a long period before becoming disabled).

Supplemental Security Income pays monthly benefits to people with disabilities who have limited income and resources.  Both children and adults can receive these disability benefits if they meet the requirements

Monthly payment of SSI benefits in 2019 average $771 per month for individuals and $1,157 for couples. 

How to Qualify For Supplemental Security Income

Just like the SSDI program, the Supplemental Security Income program has stern eligibility requirements every applicant must meet before they can qualify for SSI benefits. 

Income

Supplemental Security Income is only offered to people with disabilities that have limited income and resources so if your income is above the allowable limit, you will not be eligible for the benefits.

SSI program has its own definition of countable income. Your monthly earnings could be really good but considered uncountable by the SSI program and that would make you eligible for SSI benefits. Read more about Supplemental Security Income (SSI) Income.

Disability

You would have to meet the Social Security definition of disability before you can be eligible for SSI benefits. However, there are different definitions for adults and children.

In adults, the disability must stop them from performing any gainful activity, expect to result in death or last for more than 1 year. Individuals aged 65 and older are also qualified for SSI benefits if they have limited income and resources.

Individuals that are legally blind can also apply for SSI benefits.

How to Apply For Supplemental Security Income (SSI)

You can apply for Supplemental Security Income online or visit your local security office to begin your application process. If you wish to do it online, you can start the process here.

Insurance Companies That Provide Disability Insurance

Companies who offer disability insurance are usually the next option for people who are unable to meet the eligibility requirements of Social Security Benefits. However, getting insured from a private company is quite different.

You will be required to pay a monthly premium for a certain period of time (just like any other type of insurance). Insurance policies are usually the same with other types of insurance like car or health insurance.

These insurance companies sell different kinds of insurance policies that cover a specific type of disability. Some companies sell accident-only insurance policies which is ideal for individuals who engage in dangerous jobs or are accident prone.

There are several companies which are considered the best when it comes to disability insurance. These companies offer the best insurance policies which are flexible and make up for the financial strength of the beneficiary. These companies are also well-rated by A.M. Best – a reliable insurance rating company with the most accurate and dependable information.

Top 6 Disability Insurance Providers

1. Assurity Life Insurance Company

Assurity is one of the top-rated and popular insurance companies that offer disability insurance. The company has flexible insurance policies that should suit the need of any applicant regardless with respect to their financial strength.

Assurity offers short-term and long-term disability insurance with the best benefits. They offer individual plans (for those who are self-employed or own a business) and group plans (for employees and organizations).

Assurity disability insurance plans are open to individuals between the ages of 18 – 59 with benefits periods from 1 – 10 years. Its insurance policies consists of features like home medication benefits, vocational rehabilitation benefits and survivor benefits with coverage up to $3,000

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2.   Guardian Life

New Guardian Corporate Logo

Established in 1860, Guardian Life is one of the oldest insurance providers offering disability insurance in the US.

The company has flexible and favorable insurance policies that make it one of the best-rated insurance providers in the US with an A++ rating from A.M. Best.

Guardian life offers benefits periods of 2, 5 or 10 years based on occupation class. Disability benefits are available until the beneficiary is 67 years old.

Guardian life provides individual disability insurance, group disability insurance disability, disability insurance for business owners and a supplemental plan.

It’s ProVider Plus plan is one of the most unique individual disability insurance plans which provides benefits to individuals who are unable to perform their job due to a disability even if they could take another job.

3. Mutual of Omaha

Mutual of Omaha is one of the few insurance providers whose policies come with additional benefits and riders. Like other disability insurers, it has short-term and long-term disability insurance plans.

Its short-term plan is available to individuals between the ages of 18 to 61 with monthly maximum benefits of $5,000. This plan is also guaranteed renewable through age 67 and covers most occupational classes.

Its Long-term disability insurance is also available to individuals between the ages of 18 to 61, however, monthly maximum benefits are at $12,000. Its long-term plan is also guaranteed renewable at age 67.

You can only renew any of the plans till age 75 if you’re still working full-time.  Some of the benefits built into its customizable plans include terminal illness benefit, rehabilitation benefit, survivor benefit, cost-of-living adjustment rider, and critical illness benefit.

4. Ameritas Life Insurance Company

Ameritas Life Insurance goes a step further to attract customers with a lot of needed benefits that make its disability plans one of the best among disability insurers in the U.S. The company was founded in 1887 and has continued to offer top class insurance services which has gotten it an “A” rating from A.M. Best.

Its insurance policies are quite similar to that of most disability insurers with benefits periods of 2,5, or 10 years for age 70. It’s long-term and short-term disability insurance plans are renewable with several built-in benefits like cosmetic disability and waiver of premium with claim approval

Ameritas offers two types of disability insurance which are

  • Dinamic Foundation
  • Dinamic Fundamental

Its Dinamic Foundation has a unique non-disability injury feature which reimburses medical expenses to the beneficiary. Its COBRA Premium benefits reimburse premiums to beneficiaries who lose health insurance coverage due to their disability. 

Its Dinamic Fundamental has an easier approval process, however, you would have to work at least 30 hours a week and not have a high-risk job to be eligible.

5. Principal Financial Group

Principal Financial Group is a top-rated insurer with one of the best insurance policies among insurers in the U.S. The company offers long-term disability insurance with several benefits and a monthly maximum payment of $20,000 which covers both partial and total disability.

Payment is adjustable and could be accelerated if the beneficiary has a terminal illness. Its short-term disability insurance also covers partial and total disability, however, the monthly maximum payment is lower.

The company’s payment model is quite flexible and is made to suit the financial strength of the beneficiary. Two beneficiaries won’t pay the same monthly rate if they are of different genders even though their health status and age are the same.

This way the company is able to offer full protection to its beneficiaries if they become disabled. To qualify, you would have to work at least 20 hours a week which is way lesser than the requirement of other insurance providers.

Principal Financial Group also offers individual and group disability insurance plans. The terms of its insurance policies can be amended for individuals who seek non-work related disabilities, maternity coverage and survivor coverage.

6. MetLife

MetLife is another great choice for people seeking disability insurance to consider as it offers insurance plans for almost every occupational class. Its flexible insurance plans, policy riders, and other insurance services have earned it an “A+” rating from A.M.Best.

MetLife offers three individual disability insurance plans.

MetLife Income Guard: this insurance plan provides coverage and customizable insurance benefits for medical professionals and executives.

OMNI Essentials: this insurance plan offers coverage and insurance benefits to most occupational levels and is best for beneficiaries on a tight budget.

Salary Saver-CR Only: this plan is specifically for consumers in CA

Just like most insurance providers, Metlife provides short-term and long-term disability insurance plans.

Its short-term disability insurance plans have a benefit period up to 1 year with financial incentives to help you get back to work. Its long-term disability insurance plan covers essential living expenses and also includes financial incentives to help you get back to work.

Conclusion

Most Americans wouldn’t consider disability insurance due to the fact that the likelihood of a person getting disabled before retirement is quite low. However, that was in the past, as statistics have shown there is a sharp increase in the chances of people getting disabled before retirement.

This makes signing up for a disability insurance plan very important. In the event that you become disabled, you could easily opt for Social Security benefits, however, the monthly payable benefits are barely sufficient to cater for living expenses, this is why you have to go for either individual or group disability insurance from private insurers.

You can start by trying any of the options we listed above, however, make sure you compare their rates and insurance policies before settling for anyone of them.

Do you know any other top-rated disability insurance company that should be on our list?

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