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The Best Supplemental Individual Disability Insurance

Researcher & Writer
November 06, 2017

At TermLife2Go, we review the best disability insurance companies providing supplementary disability insurance. Our goal is to know the ins-and-outs of the different private disability income insurance policies so that we can provide our clients with the best company and policy that aligns with each client’s unique need and goal.

In the following article, we will review the different supplemental disability insurance companies, why you should consider supplementary disability insurance, and what to expect if you plan on moving forward.

What is supplementary disability insurance?

Supplementary disability insurance is a contract between the insured and insurer for additional individual disability income, beyond any group coverage, that provides an additional income benefit if the insured becomes disabled due to an illness or injury.

Supplemental disability insurance can be short-term disability insurance. Short-term disability income can provide immediate financial relief, which can protect you from racking up credit card debt or tapping into your emergency fund. However, it is only a short term solution.

Long-term disability insurance provides an income benefit typically 2 years or longer. It protects your financial well being when you are unable to return to work for a long period of time. Generally, anyone considering supplementary disability insurance is more concerned about what would happen over the long term, since many group disability insurance policies only cover 2 years.

Also need life insurance?

If you need life insurance and you are considering individual disability insurance, in our opinion, it is to your advantage to get both policies at once, with the same insurer. Since you will already have to go through underwriting for life insurance, you typically won't have to do much additional work on your part to apply for disability insurance.

Check out our article on the best life insurance companies for more on our top picks.

Top 20 Best Disability Insurance Companies

 The following carrier list represents both group and private disability insurance companies, offering both individual short-term and long-term disability income insurance. Not all of the companies in the table below will offer supplementary disability insurance, as some focus exclusively on group disability insurance. 

Supplemental Disability Insurance Cost

 As a general rule of thumb, you can expect to pay roughly 1-4% of your monthly income in disability insurance rates. For example, if your monthly income is $5,000 a month, you can expect to pay $50 to $200 a month for disability income protection.

But that is for an individual policy, not a private supplemental disability insurance policy. With supplementary disability insurance you do not need to replace all your income, just a portion, which will help keep your premiums even lower.

And know that 1-4% is a general rule of thumb. There are many factors involved and many ways to get discounts. Further, different companies are going to charge different disability insurance quotes based on different factors.

So, what should you do if you want cheap disability insurance? Give us a call and speak to a pro who can help you shop for the right policy, with the right company, at the right price.

Should I get supplementary disability insurance if I already have group disability insurance?

When deciding on whether you should get supplementary disability insurance to an existing group disability insurance policy, you should go through our checklist to determine if your current coverage provides you with the following:

Does your group disability insurance provide a large enough income benefit?

Most group disability income insurance plans provide 50-60% of your current income. Getting 50-60% of your income may be enough, but not if your disability income benefit is taxed. Which leads us to the next question on our checklist...

Will your group disability income benefits be taxed?

If your employer pays your group disability insurance premium then your income benefit will most likely be taxed. And if it is taxed, then an income benefit of 50-60% of your current income, after taxes, is certainly not going to be enough to keep you solvent for long.

Does your group disability insurance only include your salary?

If you work in an occupation where you receive overtime, commissions or bonuses, or even 401k matching, does your disability insurance from your employer cover these additional sources of income? If not, then a disability income benefit of 50-60% of your current income, after taxes are taken out, is a pittance in comparison to what you were making before your disability.

Does your group disability insurance provide you with a long enough income benefit?

Many employer-based disability income insurance policies provide an income benefit period of 2 years. Perhaps your employer offers long-term disability insurance of 5 or 10 years. Finding out how long of an income benefit period you will be eligible under your current employer-based plan will help you determine how much supplemental disability insurance coverage you need and for how long.

Does your group disability insurance provide you with own occupation definition of total and partial disability?

A true own occupation definition for total disability and partial disability means you will receive your benefits if you are unable to return to work in your regular occupation, even if you return to work at a different occupation in some capacity.

Often, employer-based plans will have a 2-year own occupation definition for total disability that changes to any occupation definition after two years have passed. An "any occupation" definition requires your disability prevent you from working in any occupation. The any occupation definition is much broader than the own occupation definition of total or partial disability.

Is your group disability insurance portable?

If your policy is portable it means you can take your disability insurance policy from your employer with you when you leave your current employer, to take a similar position in the same occupation, with a new employer. If your policy is not portable, you will lose your disability insurance coverage when you leave your current employer for another.

What should I look for in a private supplemental disability insurance policy?

Provides the additional income you need

Group disability insurance provides around 40-60% of your salary, and if your employer pays for it, your income benefit will likely be taxed. And the income benefit will usually not take into account overtime, commissions, bonuses, or other incentives, such as 401k matching plans, etc.

So, when you are looking into supplemental coverage, it is important that you consider an amount that will make up the difference between what your group plan provides and what you need.

The good news is a private long-term disability income insurance plan that you pay for is typically not taxed. Therefore, you can take the additional disability income you need and drop it by around 20-30% depending on your tax bracket.

Provides own occupation definition of total disability

It is important that you choose a policy that uses the own occupation definition of total disability, as compared to any occupation. Own occupation definition of disability refers to your inability to do the substantial and material duties of your own occupation. Any occupation, or any gainful employment, is too broad a definition and requires that you not be able to work in any occupation in order to qualify for your disability income benefit.

Now, it is important to understand that certain occupations do not qualify for an own occupation definition. Certain hazardous jobs that rate higher may not provide the ideal definition for total disability or the period where own occupation is applied is limited in time.

Provides you with the benefit period you need to get you to retirement

When deciding on the best long-term disability insurance you want to think about how long of an income benefit period you need. Based on your occupation class, you can get anywhere from 2 years, 5 years, 10 years, to age 65 and to age 67, with some companies allowing conditional coverage to age 75. The longer out your income benefit period, the more your disability insurance premiums will be, but the longer your protection will run.

Provides a non-cancelable and guaranteed renewable option

You are going to want to try and get a policy that is non-cancelable and guaranteed renewable.

Non-cancelable means the premiums will remain fixed for the entire policy. So, if your policy provides an income benefit period to age 67, non-cancelable means the disability insurance premiums will not change until you turn 67.

Guaranteed renewable means the policy cannot be canceled until you reach your agreed-upon income benefit period, i.e. 2, 5, 10 years, or to age 65, or to age 67, etc.

Benefits of Supplemental Disability Insurance

 Easy to apply for

A lot of the supplemental disability insurance policies out there are considered no exam disability insurance since you only have to answer some health and lifestyle questions.

Alternatively, if you apply for life insurance and disability insurance, the life insurance application and underwriting will cover most things the disability insurance underwriter would want to know.

Fixed premiums

If you choose a non-cancelable supplementary disability insurance policy, your premiums will remain fixed for the duration of the policy.


Your private long-term disability insurance premiums are paid with after-tax dollars. Since you used after-tax dollars to pay your premiums, your income benefit will normally be paid to you income tax-free.

Protect Insurability

The younger you are when you apply for private disability insurance, the lower your premiums will be. You have two things going for you when you are young, your age and you probably do not have any pre-existing medical conditions. All this adds up to cheaper disability insurance rates.

Further, you can attach a disability insurance rider that allows you to purchase more disability insurance down the road. So, as you earn more income, your policy will provide you with the ability to add additional coverage with no evidence of insurability. You are already locked into a plan, so whether or not you develop a health condition, you will still have access to your existing coverage and more coverage down the road if you choose.

Fund a Roth IRA

Not many people consider this but if you are disabled for a long period of time, your supplemental disability insurance income benefit can also help contribute to a Roth IRA.

Think about it for a second. If you stopped paying into a retirement plan for years during some of the most productive years of most people's life, what is going to happen come retirement? You won't have anything set aside.

So, use your supplemental disability income benefit to fund your own retirement plan, such as a Roth IRA.

What information will the supplemental disability income insurance company need?

The disability insurance company will perform a background check. One of the primary sources the insurer will gather information from is the MIB Medical Information Bureau. The MIB keeps a record of any previous applications you may have submitted to other disability insurance carriers. So, it is important that you fully disclose everything required for your application.

It is important to understand that you will need to provide the current benefit amount you will receive from your group disability insurance policy on your application, the total monthly benefit amount and if it is employer-paid. You will also need to disclose if you have an existing supplemental individual disability income insurance policy. Disability income providers will not over-insure you so they want to know how much disability income coverage you currently have.

Further, you will need to provide the company with your personal information; name, date of birth, Social Security Number, if you are a U.S. citizen, birthplace and gender.

In addition, the private disability insurance provider will also request your employer’s name, occupation, date of hire, your income, the number of hours you work per week, if you currently have any restrictions due to injury or illness and if you use tobacco.

Finally, the requirements for most disability insurance policies is that you answer certain health and lifestyle questions. The main concerns the carrier is asking about will be any pre-existing medical conditions such as cancer, heart disease, diabetes, stroke.

Additional Information on supplementary disability insurance

You should also be aware that supplemental private long-term disability insurance comes with exclusions.


Most disability insurance companies will not provide benefits for a disability where the following exclusions contributed to or primarily caused:

  1. war or act of war, whether declared or undeclared; or
  2. the suspension, revocation or surrender of your professional license to practice in your own occupation; or
  3. you commit a crime or engage in an illegal occupation; or
  4. your injuries are intentionally self-inflicted; or
  5. any loss specifically excluded by name or specific description detailed out in your policy.

Next Steps

Interested in comparing supplementary disability insurance plans? Give us a call today and speak to an experienced private disability insurance agent who can go over the different companies and plans that meet your specific needs, goals and objectives.

Written by
We are a team of life insurance experts with the simple mission of helping you find the best coverage for your unique situation. We research, review, and rank life insurance companies to make that process easier.