Compare quotes and get disability insurance right

Most employers offer short-term disability insurance, but independently buying a long-term disability insurance plan will provide more robust coverage.

What’s the difference between long-term and short-term disability insurance?

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:

• Social Security disability insurance (SSDI)
• Self-funding via an emergency fund
• Workers' comp
• Relying on friends and family for financial support

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.

Learn more about all the types of disability insurance.

There are several factors to consider when deciding which disability insurance policy is the best for you:

• Coverage amount – The amount of money your insurer will pay to you if you become disabled. A typical benefit amount is around 60% of your gross income for long-term disability insurance. This is also known as the participation rate.
• Elimination period – How long after you become disabled before you will begin receiving benefits. Typical elimination periods for long-term policies are 30, 60, 90, 180, or 365 days, and between two and four weeks for a short-term policy. This is also known as the waiting period.
• Benefit period – The amount of time you will receive benefits — or funds from the insurance company. Typically benefit periods are two years, five years, ten years, or until your retirement. Because the average disability lasts around three years, we recommend a policy with a five-year benefit period.
• Non-cancelable – The insurer can never legally change the terms of a non-cancelable policy, including how much you pay.
• Own-occupation – An own-occupation policy will continue to pay out if you can’t work in your designated job, even if you are able to work elsewhere in another capacity.
• Exclusions – Exclusions limit what disabilities are covered by a long-term disability policy. These are often pre-existing health conditions but may also include risky hobbies like skydiving.

Learn more about how to buy disability insurance.

• Coverage amount – Higher coverage amounts result in higher premiums.
• Benefit period – Longer benefit periods result in higher premiums. The most cost-effective benefit period is five years, but a benefit period that extends to age 65 is the most common.
• Elimination period – Longer elimination periods result in lower premiums. The most cost-effective elimination period is 90 days.
• Built-in policy features – Some features like own-occupation coverage may increase the cost of the policy.
• Riders – If you add on additional features that aren’t included in your policy, you will pay higher premiums.

Learn more about how much disability insurance costs.

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.

Check out our full breakdown of the best disability insurance companies in 2021.