Disability insurance should i get

According to the Social Security Administration, one in four Americans will become disabled before ever reaching retirement age. Disability coverage provides you with the support you need if you were to become hurt or sick and could not work. Long-term disability insurance can offer years of replacement income, lasting well into your 60s in many cases, while short-term disability helps during a temporary injury or illness, or when you give birth.

While both policies are worth considering, long-term coverage is arguably the most valuable, especially if your ability to work becomes permanently affected. We compared more than 25 different insurers to determine the best long-term disability insurance for you. Here are our top picks and why they were selected. Claiming our best overall spot, Breeze makes getting coverage simple by taking as little as 15 minutes to apply for and purchase a disability policy online.

Noncancelable and guaranteed renewal coverage through age 65 or Though Breeze is a fairly new digital insurance company, only founded in , its simple buying process makes it our top choice for individual long-term disability coverage. Policies are underwritten by Assurity, an insurer rated A- by AM Best that has been providing coverage since Breeze uses automated underwriting technology and algorithms to change the way we buy disability insurance, offering quick online quotes and coverage to customers all across the country.

If eligible, you can even purchase this coverage with just a few clicks, and a medical exam is not required for many customers. Elimination or waiting periods on Breeze policies range from 30 to days.

Benefits can run one, two, five, or 10 years in length, or they can last until you reach retirement age 65 or 67, depending on your policy.

Available options on Breeze long-term disability policies include automatic benefit increase, guaranteed insurability, own occupation , supplemental DI, and residual disability benefit riders. While Breeze offers coverage to a variety of occupations and industries, laborers may find that their policy options are a bit more limited.

Also, some products and rates will not be available to residents of New York, where Breeze policies are underwritten by a separate arm of Assurity. With four policy types offered and a slew of riders and coverage options, Guardian Life is our preferred choice for customization of your disability insurance. Options include group policies and supplemental insurance coverage. To help you further customize your policy, you can choose between riders like a future benefits increase, guaranteed renewability, and student loan protection, allowing you to completely customize a policy according to your needs.

Founded in and backed by Berkshire Life Insurance Company of America, Guardian Life offers a number of disability insurance options including long-term coverage. Some policies will allow you to renew your coverage beyond age 65 or 67 if you are still employed and not disabled.

Every policy is different, but a typical elimination period is usually 3 months long. Depending on your age, location, and occupation, you may be able to get a quote online; others will need to contact a Guardian representative to get a price for coverage.

While Guardian Life offers individual long-term disability policies, as well as group coverage and supplemental policies, there are more products available to groups. Guardian offers long-term disability policies for a variety of professions, but they admittedly prefer certain occupations, many of which are in the medical or dental fields.

Whether you are a mechanic, welder, state patrol officer, or hold any number of other high-risk occupations, Assurity is likely to have disability coverage for you, making them our top pick for risky occupations. Policies come with multiple built-in benefits as well as additional riders to choose from. Built-in benefits include waiver of premium , presumptive disability benefit, and more. Non-cancelable rider only lasts the length of the policy itself and is not applicable at all for some higher risk occupations.

If you work in a higher-risk profession—such as an electrician, welder, state patrol officer, mechanic, etc. In fact, many companies will refuse to insure these occupations altogether. Benefit periods can be chosen from one, two, five, or 10 years, or through retirement age 65 or 67, depending on underwriting class and your age , and elimination periods are 30 to days. Since you will need to contact an agent to finalize your coverage and purchase a policy anyway, though, this may not matter.

Principal Financial Group offers a few different disability insurance products, including the Simplified DI program. With a history dating back to , Principal Financial Group has a long and successful track record of offering quality insurance coverage. Elimination periods range from 8 to 90 days, with benefits lasting two or five years, or through retirement ages 65, 67, or 70, depending on your policy.

Unlike many other companies that require 30 hours of weekly work to be considered, Principal only requires you to work a minimum of 20 hours a week in order to qualify for a policy. Similarly, if you have a legal or medical practice and own your offices, you could rent that space out to another practitioner.

So, try to put a number on all of the items discussed above and enter them into this simple formula:. Remember: Long term disability coverage is meant to last a long time, providing a monthly benefit that could last for decades. That kind of coverage comes at a cost.

The lower the monthly benefit you can comfortably live with, the easier it will be to pay premiums while you are healthy and working. The type of coverage — own-occupation or any-occupation — will have an impact your premiums. To illustrate, here is how true own-occupation coverage works in Guardian LTD policies:.

So, if you have the energy, interest and motivation to pursue another occupation while totally disabled in your occupation, our True Own-Occupation definition does not prevent you from doing so. Riders also affect the cost of your policy. These are optional provisions that enhance your coverage or benefits. A top-tier provider will offer disability coverage with riders , allowing you to tailor a policy to your specific needs.

Some of the most popular choices offered by companies such as Guardian include:. The scenario below illustrates how a fictionalized IT professional tailored a Guardian Provider Choice plan to meet her budget — and how that coverage worked to meet her needs when she was disabled.

Knowing that she was price-conscious, Sarah and her financial professional initially explored a more basic Essential package. Balancing parenthood and working full time kept Sarah busy, and she was caught off guard by her cancer diagnosis. Because her cancer was aggressive, she started a regimen of radiation and chemotherapy prior to surgery and was left with lingering fatigue. After 18 months, Sarah was able to return to work part time.

Either way, group disability insurance can be an excellent choice: Because the company or association is buying for a large group of people, the premium is typically lower than for an individual policy. Your employer may also subsidize a portion of the premiums, further lowering your cost. However, if premiums are paid with pre-tax dollars usually the case with employee benefits then the income benefit later on will typically be taxed.

Although not many disability policies purchased through an employer are portable, it is definitely something you should look into. If portability is important to you, you can consider purchasing disability insurance on your own.

Premiums also vary depending on the insurance provider. Some policies allow you to lock-in a premium, while others do not. Also, you can get a non-cancelable policy or a guaranteed renewal policy. These options greatly differ, so be sure to choose the one that suits your situation best.

A guaranteed renewal allows you to renew without making any changes to your coverage, but your premium can fluctuate. A non-cancelable policy means your coverage and your premiums cannot be changed, assuming you are paying your premiums on time. Also, be sure to find out if premiums are waived during a qualified disability. Cost of living benefits are not included in most policies. Adding this rider is definitely something you will want to consider when making your choice regarding disability insurance.

Cost of living benefits are meant to provide financial stability by offering an increasing benefit. When choosing cost of living benefits, consider choosing one that increases on a compounding basis. Compound interest is earned on the principal and the interest.

This additional rider can help your benefits keep pace through inflation even after your disability. Another thing to be sure your disability insurance policy includes is residual benefits.

Residual benefits will help you make up your income if you can only work partly. Residual benefits will help you to make up the rest of your income, making these benefits extremely important.

Be careful, as some insurance companies commonly put restrictions on residual benefits or tweak the definition to their liking. It is also very important to note the collection time period, as this could affect which insurance company you choose.

With some policies you can start collecting as soon as 30 days after your disability claim has been filed. The collection time can range from 30 days to more than , so this figure could be a deal breaker. Many policies can be changed by the insurance company at any time over the course of your coverage. This allows insurers to raise your coverage rates whenever they want, whether your policy is up for renewal or not.

Likewise, insurance companies could change the terms of your insurance coverage without letting you renew. This makes it imperative to understand when and how changes can be made to your insurance. The future increase option rider is an addition to your disability coverage. However, it is worth considering if you think your income may increase over time. With this additional rider, you are able to increase the monthly benefit of your policy, disregarding the status of your health.

Without this rider, your policy will not protect your future income whatsoever. However, many insurance companies will limit the total of supplementary coverage that can be implemented each year.