What Are the 5 Options of Disability Insurance?

Wellman Shew

January 24, 2023

There are several types of disability insurance. These include Long-term disability, Own-occupation disability, Social security disability, and Short-term disability. Choosing the right plan depends on several factors.


Short-term disability insurance is designed to replace income in the case of a temporary illness or injury. It also can be used to help with a mortgage, a car loan, or other monthly expenses.

The amount of money you can receive in the form of short-term disability benefits depends on the type of policy you choose. Most policies pay a benefit amount that is equal to 40% to 70% of an employee’s pretax salary. However, you may also be able to get a policy that lasts for an entire year.

Both long-term and short-term disability insurance provide protection for employees with serious illnesses or injuries. But there are differences between the two. Long-term disability coverage is more expensive. Typically, there is a longer waiting period before the policy is activated.

Short-term disability insurance is usually less expensive. Unlike long-term disability insurance, however, it is generally provided by an employer. In some states, employers are required to offer short-term disability insurance.

To claim a short-term disability benefit, the employee needs to submit a medical form with medical records. This form describes the condition and its impact on the employee’s ability to perform regular work duties.

Long-term disability insurance

Long-term disability insurance is designed to replace your income in the event that you can’t work due to a severe medical condition. You’ll be provided with a steady stream of revenue, helping to pay your bills and avoid tapping into other assets.

Long-term disability insurance is generally required by employers in certain states, and many private businesses offer a plan. Depending on the level of coverage purchased, it can last up to ten years.

Most long-term disability claims are for chronic conditions. However, there are also cases of catastrophic accidents. These are covered under a long-term policy, which typically pays a percentage of your salary until the time you can return to work.

Some of the best policies available to you include the Mutual of Omaha, Guardian Life, and Principal Insurance. They offer a wide variety of benefits and discounts.

The best policy to purchase depends on your needs and your budget. You can choose from several policy types, including a short-term or long-term policy, along with additional riders that extend your coverage.

Own-occupation disability insurance

Own-occupation disability insurance is one of the most reliable forms of protection available to professionals. It offers financial security when you become disabled due to an illness or injury.

There are two main types of own-occupation disability insurance. These include true own-occupation and modified own-occupation.

The true own-occupation definition is crucial because it means that the claimant has to be unable to perform material duties in his or her own specialty. For example, a surgeon might be unable to perform surgery because of nerve damage. With an actual own-occupation policy, he or she can continue to receive disability benefits even after retraining in a different medical specialty.

Modified own-occupation policies, on the other hand, can offer more flexibility. In some cases, the benefit period is reduced, or the insurer may reevaluate a point after 60 months.

Before applying for own-occupation disability insurance, you should know the benefits that you’ll receive. Generally, the benefits will offset any income you’re able to earn while you are out of work.

Social security disability insurance

The program has a strict definition of disability, which requires a medically determinable impairment. An impairment must be expected to last at least one year or result in death. People who have been denied benefits may appeal to an administrative law judge at SSA.

Applicants who apply for SSDI must provide complete medical records to support their claim. In addition, they must be employed and earn at least $1,310 a month.

The Social Security Disability Insurance (SSDI) program is a federal program that provides financial assistance to qualifying adults with disabilities. SSDI provides modest benefits, allowing disabled people to meet basic needs. It is funded by payroll taxes and 0.9 percent of the taxable wages paid by employers.

SSDI is managed by the Social Security Administration. Benefits are usually direct deposited to a bank account. SSA also offers advocacy services, vocational rehabilitation, and other assistance for beneficiaries.

Benefits are determined by the process of quality reviews. Some of these reviews are conducted by state agencies.