How do I get disability insurance?

Here are the main ways to get disability insurance or disability benefits:

Through Your Employer

Employer-sponsored disability insurance is a common benefit offered by businesses, especially larger ones. It is typically provided on a group basis.

The pros of employer-sponsored disability insurance include:

  • Typically the coverage is automatic, meaning there is no underwriting or medical exam. This is a big bonus if you have an underlying health condition that could make getting an individual disability insurance policy difficult. (There may, however, be a waiting period before you can access your coverage.)
  • There’s often no premium for you to pay because it’s included in your overall benefits package.
  • Typically coverage increases automatically as your salary does.
  • If your employer doesn’t offer disability insurance as a paid benefit, they may offer it as a voluntary benefit. That means you would be pay for coverage, but it is often in the form of a payroll deduction. This kind of coverage is typically easier to qualify for and less expensive than buying disability insurance on your own.

There are, however, some cons to employer-based disability insurance. They include:

  • There are often coverage limitations that might prevent you from replacing the amount of lost income that you’d need to be OK financially.
  • You lose the coverage if you leave or are terminated from your job. 

Through a Professional Organization

Many professional organizations for people in a specific industry offer the option to buy disability insurance through a group plan. One pro is that this coverage typically has less underwriting than disability insurance bought on your own. This means that it’s easier to qualify for coverage. It’s also usually less expensive than buying disability insurance on your own.

A con is that the professional organization may choose to stop offering the coverage at any time, which would terminate your disability insurance. You would also lose coverage if you change professions or leave the professional organization.

Through the Government

There are three main ways to receive disability benefits from the government:

  • Workers Compensation. Every state has their own Workers Compensation laws that employers must follow. Workers Compensation covers some (but not all) of your lost income if you suffered an injury on the job or developed an illness or disease because of your job. This coverage can be provided by your state or through a private company. Pros to Workers Compensation are that it’s automatically offered to you free of charge. Cons are that it only covers work-related injuries and illnesses and it may not be enough to cover your lost income.
  • Social Security Disability Insurance. The federal government disability insurance program covers most workers. Your disability benefits are based on the amount of income on which you have paid Social Security taxes. While most workers are automatically covered, qualifying for benefits isn’t easy. According to the Social Security Administration, around 65% of applications for Social Security disability benefits were initially denied. What’s more, the disability benefits in 2020 only average $1,258. That’s barely enough to remain above the poverty line.
  • State disability insurance programs. Five states—California, Hawaii, New Jersey, New York and Rhode Island—and Puerto Rico offer short term disability insurance. It covers a portion of your income for about four to six months and is paid for through a payroll deduction.

On Your Own

One of the best ways to get disability insurance is to buy it on your own. This lets you get the exact amount of coverage you need and lets you compare coverage and prices from a variety of insurance companies. Plus, you don’t need to worry about losing coverage if you change jobs or leave a particular professional organization. Your best bet is to work with a licensed insurance agent to learn about your options and get a disability insurance quote. He or she can help tailor coverage to your exact needs as well. Learn more about working with and finding an agent.

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