Types of Disability Insurance

Shawn Plummer

CEO, The Annuity Expert

In life, the unexpected is the only certainty. Unexpected health issues or injuries can wreak havoc on your financial stability, leaving you in a dilemma without proper preparation. Disability insurance provides a safety net, ensuring you are covered when life throws curveballs. But what types of disability insurance are available? Which benefits would a disability plan most likely pay? What are the best companies for disability insurance? This guide explores all these and more, ensuring you have the information to make an informed decision.

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Understanding Types of Disability Insurance

Short-Term Disability Insurance

Short-term disability insurance provides benefits for a limited period, typically anywhere from 3 to 6 months.

  • Example of Disability Insurance: If someone breaks a leg and cannot work for three months, short-term disability insurance can cover part of their income.

Long-Term Disability Insurance

Long-term disability insurance supports individuals when disabilities last for extended periods.

  • Example of Disability Insurance: If a person suffers from a chronic illness that prevents them from working for several years or even a lifetime.
What Are The Types Of Disability Insurance

Exploring Different Types of Disability Benefits

Social Security Disability Insurance (SSDI)

SSDI benefits people who have paid into Social Security and meet medical criteria.

Workers’ Compensation

This pays benefits if the disability occurs as a result of work-related activities.

Private Insurance Plans

These include employer-sponsored plans and individual policies from private insurers.

Comparing the Best Companies for Disability Insurance


Assurity covers primarily blue-collar workers like roofers, plumbers, and electricians. They offer short-term disability and long-term disability, something most companies do not offer. They also have many additional benefits that you can add to your coverage.


MassMutual is a well-known insurance company specializing in white-collar workers like small business owners and professionals. They offer a sound business disability plan for small business owners, and they also offer individual plans as well.


Petersen is known for covering risks that traditional carriers won’t cover, such as someone up to age 70, and high-risk occupations like pilots, dentists, chiropractors, celebrities, and high-earning executives. They also issue coverage over traditional carriers’ 60-65% benefit.

What Is the Hardest State to Get Disability Insurance?

Certain states have more rigorous criteria for granting disability benefits, making qualifying more difficult.

The states with the most challenging criteria for disability generally have a “medical-vocational” approach, such as New York and California. These states place more emphasis on an individual’s ability to work than they do on their medical condition or history.

Other stricter requirements include proof of continuing medical treatment, multiple doctors’ opinions, and personal visits to the Social Security Administration.

What Are the Easiest States to Get Disability Insurance?

The states with more lenient criteria for disability generally have an “impairment-severity” approach, such as Kentucky and Ohio. In these states, medical evidence is the primary factor in determining whether or not an individual is eligible for disability benefits.

In addition, some states have less strict requirements regarding the amount of evidence necessary to receive benefits, more lenient eligibility criteria, and shorter processing times. Examples include Florida, Alabama, and Louisiana.

What Are The Best Disability Insurance Companies

What is the Waiver of Premium?

The waiver of premium is an essential consideration for disability insurance. It waives the need to pay premiums while you cannot work due to a disability. This feature can be added to most policies, but it’s important to note that some carriers may restrict when or how often this feature can be used.

The waiver of premium provision does not include the ability to suspend or cancel the policy in case of a disability. The waiver of premium is intended to cover premiums when an individual receives benefits from their disability insurance plan. It does not protect if an individual chooses to terminate or suspend their policy due to a disability.

Additionally, the waiver of premium does not provide additional benefits or coverage if the policy is in effect. It solely provides relief from premiums while an individual is receiving disability benefits.

Next Steps

Disability insurance is a precaution and a necessity in safeguarding financial stability. From the different types of disability to the benefits offered, knowing what’s available and what suits your needs is vital. The two major types of disability insurance – short-term and long-term – each offer unique advantages. Consider the region-specific factors and company reputations before making a decision. With this knowledge, you can face the future confidently, knowing you’ve taken an essential step toward securing your well-being. Always remember, the right disability plan pays when you need it most!

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Frequently Asked Questions

Is Disability Income Taxable?

Disability income can be taxable or tax-free, depending on the source of the benefits and how the premiums were paid. If you paid the premiums with after-tax dollars, benefits are typically tax-free. Benefits might be taxable if your employer paid the premiums or you paid with pre-tax dollars.

Can I quit my job on disability?

Yes, you can quit your job while on disability, but it may affect your benefits depending on the terms of your disability insurance and the nature of your disability. It’s essential to consult with your insurance provider or a legal professional to understand the specific implications of your situation.

What is the most disability will pay?

The amount disability insurance will pay depends on the policy and your income before becoming disabled.

Can you get 100% disability?

Yes, it is possible to receive 100% disability benefits under certain circumstances, such as through the U.S. Department of Veterans Affairs for military-related disabilities. Some private disability insurance policies may also offer benefits close to 100% of pre-disability earnings for a limited time. The specific terms and eligibility criteria vary among different insurers and programs.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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