Did you know that the average American has a one-in-four chance of becoming disabled before retiring? While that news may be grim, disability insurance is one of the most overlooked types of insurance coverage there is. Sure, there’s permanent disability provided by Social Security, but that can take many months to get if you’re lucky enough to have a successful claim.
(if you are denied, however, look to work with a lawyer that specializes disability claims or a company like Atticus)
Perhaps you’re covered by a disability plan through your employer. But if you’re self-employed, or you don’t have coverage at work, you should take a serious look at getting your own disability insurance policy. If you are unsure if you need Disability Insurance we put together this disability insurance explainer article to determine which type is best for you.
| Company | A.M. Best Rating |
|---|---|
| Breeze | A+ |
| Ameritas | A |
| Assurity | A- |
| Guardian Life | A++ |
| Illinois Mutual | B++ |
| Massachusetts Mutual | A++ |
| Mutual of Omaha | A+ |
| Ohio National | A+ |
| Petersen International | A |
| Principal Financial Group | A+ |
| The Standard | A |
A.M. Best Ratings are a measure of the insurer’s financial health. The range is from Superior (A++ and A+) down to Poor (D). A better rating means they’re less likely to go out of business!
Table of Contents
Breeze
Breeze is part of a new class of disability insurance companies that can get you covered in just 15 minutes. Once you feel in your information, they can decide very quickly. They can do this because they partner with Assurity, one of the companies we go into greater detail below.
If you are a healthy, employed individual then they can offer a quick application process that will rarely even require a phone call, let alone a medical exam. If you aren’t sure if you qualify, it only takes a few minutes to find out. If you are, you really can’t beat the speed and simplicity
(Breeze is a d.b.a. of Modern Insurance Agency)
Ameritas
Ameritas isn’t exactly a household name in the insurance field, but it’s one of the more well-established disability insurance providers.
They offer two primary plans:
DInamic Foundation Series. This plan provides disability insurance for both individuals and business owners. In addition to basic disability insurance coverage, it provides the following features:
- Non-disabling injury, reimbursing you for medical expenses.
- Good health, which shortens the elimination period (the time you must wait before benefits apply).
- Presumptive total disability, in which the elimination period is waived due to certain physical losses.
- COBRA premium benefits, which reimburses COBRA premiums if you lose your medical insurance due to your disability.
In addition to the above, you can also add riders that provide a cost-of-living adjustment, a future increase option (to increase benefits consistent with your salary increases), and a catastrophic disability rider, that pays an additional benefit if you’re unable to perform two or more of the six activities of daily living.
DInamic Fundamental. This is a simplified plan for those who work in less risky occupations. You must work at least 30 hours per week to qualify.
Assurity
Assurity is an excellent choice for an individual disability policy, but especially if you’re self-employed. They offer their Simplified Disability Income plan which you can apply for without going through a lengthy process. You participate in a telephone interview, then Assurity makes the underwriting decision based on information from third-party sources. Those include the MIB (which is a common source of database medical records for all insurance companies), as well as a review of your prescription database and other sources.
The plan is available for applicants between the ages of 18 and 59 and can provide up to $3,000 in monthly disability income. If you need more, Assurity does have other plans available, though they will require a more complicated application process.
Assurity also allows you to get a partial monthly benefit if you return to work on a part-time basis. They report that a typical disability insurance policy costs between 1% and 3% of your salary.
Guardian Life
Guardian Life is a diversified insurance company that offers disability insurance through Berkshire Life Insurance Company of America. The company offers both short-term and long-term disability plans, and you can even combine having both. Also, they offer supplemental disability insurance, to add extra coverage for your long-term plan.
Their ProVider Plus Plan provides long-term disability, with terms ranging between two and 10 years. You can receive coverage under this plan up until age 67. What’s more, the plan works on an own occupation basis, which means you qualify for benefits if you’re unable to continue working in your primary occupation. This is an important distinction because, under an “any occupation” plan, you will only be eligible for benefits if you are completely unable to work in any occupation, not just your primary one.
Illinois Mutual
Illinois Mutual is another major player in the disability insurance arena that offers both individual policies and plans for small business owners.
For individuals, they offer their Paycheck Power policy. It provides a basic benefit if you are totally disabled. The policy is guaranteed renewable up to age 67, and cannot be canceled except for nonpayment of premiums. You could even receive base benefits in addition to Social Security or Worker’s Comp. It works on an own occupation basis for two years or less, then requires total disability from any occupation.
For self-employed applicants, they offer their Business Expense Power policy. This is a special plan that provides monthly reimbursement for eligible fixed business expenses if you become disabled. That includes rent payments, utilities, billing and collection fees, payroll taxes, and even employee salaries. It’s also guaranteed renewable to age 67, and cannot be canceled except for nonpayment of premiums.
Massachusetts Mutual
Massachusetts Mutual, or simply Mass Mutual, is one of the biggest players in the industry, and also one of the most highly rated by third-party rating agencies.
They offer disability insurance with terms between two and 10 years, up to a maximum age of 70. Plans are designed to replace between 45% and 65% of your regular income. Like Guardian Life, their plans are based on own occupation, rather than any occupation. They also offer a very wide range of waiting periods, which are similar to deductibles with other insurance policies. As well, they have a recurring disability feature, in which the elimination period is waived if a subsequent disability claim is related to the original one.
Mutual of Omaha
One of the factors that make Mutual of Omaha disability insurance policies stand out is the incredible number of riders they can offer with their plans. These additional provisions give you the ability to customize your plan to suit your own unique needs
You can be covered up to age 67, though that can be extended up to age 75 if you’re working full-time. Their Priority Income Protection plan will provide a monthly benefit up to $,4000, for periods ranging from 12 to 36 months. The benefit can reimburse up to 70% of your net income and you can choose an elimination period of as little as 30 days.
If you need a higher level of coverage or a tailored plan to meet any budget or need, you can also consider the Disability Income Choice Portfolio. It can provide monthly benefits of up to $12,000, for two years up to age 67.
Ohio National
Ohio National is another highly regarded insurance company, and one with outstanding customer service.
Ohio National’s ContinuOn Income Solutions plan provides coverage for applicants between the ages of 18 and 70 and is both noncancelable and guaranteed renewable. They also offer a hospice care benefit in which the elimination period is waived if you’re receiving hospice benefits.
Ohio National also provides policy enhancing riders. The annual renewable disability income rider allows you to purchase a policy with a low initial premium that increases through age 55. The guarantee of physical insurability income allows you to increase your coverage annually, up to age 60. You can also choose an own-occupation rider, that will pay benefits if you are unable to work in your primary occupation, rather than any occupation at all.
Petersen International Underwriters (PIU)
Petersen International Underwriters is a company you’ll want to seriously consider if you are either a high-income earner or if you have an existing health condition at the time of application. You can think of PIU as something of a disability insurer of last resort. Premiums are on the high side, but they’ll provide coverage when other insurance companies won’t.
PIU even provides policies for those in difficult occupations, such as athletes, entertainers, and pilots. They also provide international coverage, coverage for those with risky avocations, and those of senior ages. This is the go-to company when you can’t get coverage from other providers.
Principal Financial Group
Principal Financial Group, or simply Principal for short, provides simplified underwriting for disability policies paying as much as $6,000 per month. What’s more, you can get a disability policy if you work a minimum of 20 hours per week. This is a fairly unique feature because most disability insurance policies require that you work full-time.
Principal offers an online disability insurance calculator that will help you determine how much coverage you need. You’ll enter your annual income, as well as other income sources and estimated monthly expenses. The calculator will tell you how best to accomplish your goals.
The Standard
The Standard offers a wide range of policy riders, some at no cost. There’s also an interesting automatic increase rider that will increase your monthly benefit by 4% for each of the first six years you have a policy in force.
The Platinum Advantage plan provides individual disability coverage. It includes a family care benefit, that allows you to take time away from work to care for a child or an ailing relative with a serious health condition. It can provide benefits even if your income is only reduced by 20% or more. It’s guaranteed renewable and can cover costs for rehabilitation programs.
The Standard also offers business disability coverage. The Business Overhead Protection plan will reimburse your share of business overhead expenses if you’re determined to be fully disabled. That will include mortgage or rent payments, payroll, utility costs, and even business insurance premiums.
Final Thoughts
There’s no one disability insurance company on this list that’s the best for everyone. First, think about how it fits into your overall financial picture, but never go with a policy just because it’s the cheapest. After that’s determined you can go shopping. Carefully discuss your income, occupation, overall health, and risk factors with an agent to find the best disability insurance policy for you. That’s a fool-proof way to determine the right policy for you.
Mighty Investor says
Jim,
It’s good your are highlighting the need for disability insurance. People really want to ignore the need for this, but if they have financial responsibilities beyond themselves and are currently making money, they should bite the bullet and lock in a guaranteed income stream if something goes wrong.
It’s part of growing up and realizing you aren’t immortal to recognized you need to purchase this type of insurance for yourself and your family.
A lot of folks may get a little bit from work but if you’re self-employed like me, that’s not an option. If you have financial responsibilities, insurance protects you (at least financially) from the really catastrophic problems.