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If you become sick or injured and cannot work, disability insurance replaces about 60% of your gross income — generally amounting to your actual take-home pay.
Because health insurance only covers the cost of your medical procedures and recovery, disability insurance is a necessary supplement to pay for your everyday bills and expenses. It’s crucial that anyone who relies on an income for their everyday expenses gets a disability plan — getting coverage safeguards you against the risk of missing payments on your mortgage, utilities, and other bills.
The main difference between the two products is how long they last. Short-term disability insurance lasts for a shorter period of time, usually starting at a few months and no longer than a year. Long-term disability insurance, on the other hand, can last until your retirement. Your long-term disability insurance will not begin until any short-term disability benefits have been exhausted.
Private short-term policies are available from our partner LifePreserve, but short-term disability insurance is usually the most cost-effective through an employer. Long-term disability plans are typically bought through a broker and offer the most comprehensive coverage.
If you decide that disability insurance isn’t for you, there are some substitutes to short-term and long-term disability insurance:
However, these are imperfect options that may not be feasible for covering the cost of a long-term disability. For example, Social Security disability insurance is difficult to qualify for — to get benefits, you must prove that you cannot work in any job. Additionally, the benefits offered are usually too low for most people’s needs.
Meanwhile, Workers’ Comp only pays out if you are injured on the job, but a majority of disabilities occur outside of the workplace. Purchasing a standalone long-term disability insurance plan is the best way to ensure you don’t lose your income if you become disabled.
An unexpected disability can happen to anyone. Accidents happen on and off the job, and even the healthiest people fall ill. Because of this, it’s critical that anyone who would not be able to maintain their standard of living if they lost their income gets disability insurance. However, even those with substantial savings should consider buying a policy.
According to Policygenius data, the average length of a disability for someone in their 30s is 32 months — that’s almost three years of lost wages. For people in their 40s, that number jumps to 42 months. Getting a disability insurance policy ensures that you don’t have to deplete your savings or endure financial devastation due to a temporary disability, protecting your present and future financial stability.
There are several factors to consider when deciding which disability insurance policy is the best for you:
Average long-term disability insurance policies cost between 1-3% of your annual salary, but the exact cost will depend on several factors and the type of policy you buy.
The best disability insurance company for you largely depends on the policy cost and features that work for your individual situation. Your age, health, and what you do for work will have the biggest impact on how much you pay for disability insurance, but every insurer views each application differently. Some insurance companies are better for certain professions than others, offering the best prices or most flexible options, while others may not offer you affordable rates.
Shopping around is the best way to find the right insurer who will offer you the most affordable rates — and when it comes to getting you the best coverage, Policygenius has got your back. Our agents will work with you for free to find you a policy that suits your needs at the most competitive price.
You can get disability insurance by shopping around with an independent broker like Policygenius. Policygenius agents will work with you for free to find the most affordable disability insurance policy for your situation.
Yes. Disability insurance is worth getting because it replaces your income if you become disabled and cannot work. Without this safeguard, you may be unable to maintain your standard of living.
Anyone who relies on their income to live should get disability insurance. Even those with significant savings should have a policy so that they don’t end up depleting their savings.
The two types of disability insurance are short-term disability insurance and long-term disability insurance. Short-term disability is often an employer-sponsored plan that only pays out benefits for a limited period of time. Long-term disability plans pay out benefits for disabilities that last years.