Are you looking to purchase an individual short-term disability insurance policy on your own – without going through your employer?

If so, you have arrived at the right place.

Protecting your income is very important. However, it is not always easy to find the right plan or qualify for the coverage.

Follow this four-part outline about buying short-term disability insurance for individuals.

  1. Find online quotes to estimate monthly premium cost
  2. Important definitions, exclusions, and explanations
  3. The critical difference between private and personal policies
  4. Which providers offer plans for purchase outside of employers

Individual Short-Term Disability Cost & Quotes

People buying short-term disability insurance for individuals often want a quote of monthly premium costs before making a decision. Find out the price to protect your income from a disabling accident or illness.

Get an online quote to determine premium rate estimates for a variety of configurations. Speak with an agent when you are ready to make a purchase or just have questions.

Online Quotes

Short-term disability quotes for individuals are available on another page. Be prepared to answer a series of questions. The online quote form will ask the following questions.

  • Gender –women file more sickness related claims than men do
  • Date of Birth – older people tend to use the benefits more frequently
  • Height & weight – an applicant’s body mass index influences future claims
  • Occupation – the type of job and work duties affect accidents and persistence
  • Tobacco use – smokers are much more likely to use a sickness-related benefit
  • Currently disabled – applicants must be actively working
  • Major health conditions – people with existing serious illnesses rarely qualify

Average Cost

Individual short-term disability cost per month change with the features selected at the time of purchase. The three feature selections having the greatest effect on premium rates are the income replacement amount, the benefits period, and elimination period.

Monthly Amount

The monthly benefit amount can range as high as 70% of gross income, up to a hard dollar cap. The hard dollar cap may be up to$ 6,500.

Larger income replacement amounts yield higher monthly premium costs.

Benefit Period

The benefits period describes how long claims payments may last during the time you are unable to work. Benefits periods start at 3 months and can reach up to 36 months, with intervals in between. Longer benefits periods yield higher rates.

Elimination Period

The elimination period determines how long you must wait before claims payments begin. There may be separate numbers for accidents and sicknesses. Accident elimination periods can begin at 0 days while sicknesses may begin at 7 days.

Shorter elimination periods translate into higher rates.

Short-Term Disability Insurance Definitions

Before purchasing individual short-term disability insurance, take the time to understand several important definitions. This is not an exhaustive list. From experience, we know which explanations affect the most applicants.

People frequently wait to begin shopping around only after they know they need the coverage. Many of these definitions will help you realize that buying a policy is not a viable solution to your problem.

Important Exclusions

Most short-term disability contracts for individuals will contain exclusion language similar to this. The policy will not pay benefits for losses caused by any of the following:

  • A pre-existing condition means having an illness or physical condition apparent within 12-months before the coverage effective date. Apparent means that you were treated, received medical advice or took medication for this disorder.
  • Giving birth in a normal pregnancy, where conception occurred prior to or 30 days after the coverage effective date is excluded.
  • Having an addiction to alcohol or drugs, except for prescription medications is excluded.
  • Mental illnesses including psychoneurosis, psychopathy, and psychosis are also excluded as are stress and anxiety.

Disability Definitions

Many people want to know the definition of a disability before buying individual short-term disability. Three explanations frequently come into play. In each, you must be under the regular and appropriate care of a doctor.

  1. Totally disabled means you are unable to perform all of the material and substantial duties of your regular occupation, and you are not engaged in any other employment.
  2. Partially disabled means you are unable to perform one or more, but not all of your work duties for 20 hours a week, and your employer will accommodate this limited schedule.
  3. Recurrent disability means becoming disabled, returning to work, and then becoming disabled again for the same medical condition in less than 6 months.

Worker’s Compensation

Short-term disability for individuals covers off-the-job accidents and illnesses. Worker’s compensation replaces income and reimburses medical expenses associated with on-the-job accidents and illnesses. Potential buyers should also know the definition of each category of loss.

  • Off-the-job sickness means a loss that is not covered under any occupational disease, employer’s liability, worker’s compensation, or similar law. On-the-job sickness means the opposite.
  • Off-the-job accident means that the person sustains an injury while not working at any job for pay or benefits. On-the-job accident means the opposite.

Individual Short-Term Disability Insurance Policy Types

There are two distinctly different types of individual short-term disability insurance policies. Most site visitors do not understand these distinctions until learning about them here. There are two sets of purchase channels.

  • One channel provides greater convenience – private plans bought directly.
  • The other provides better benefits – personal policies purchased at the worksite

Private Purchase Plans

You can purchase private short-term disability plans on your own – not through your employer. Contact an independent agent or broker outside of work. This approach is very convenient. It puts people in control of the process.

The two biggest drawbacks to private plans bought directly are the available benefits and stricter underwriting.

  1. Coverage for normal childbirth is not included. These plans may cover medical complications of pregnancy. However, once delivery occurs, claims payments stop.
  2. Medical and financial underwriting is more intensive. Expect to answer very detailed questions about your health. You must document earnings over a two-year period.

Personal Worksite Policies

You may be able to obtain personal short-term disability policies at your worksite – if you have the option. Employees pay the premiums themselves, so there should not be great resistance from employers for making a voluntary option available – if you ask.

These are policies owed by the employee, not the employer. The coverage is portable. Portable means that you can keep the contract on your own if you separate from your employer. The employee must make at least one premium payment via payroll deduction.

The two biggest advantages to personal policies bought through payroll deduction at a worksite are the benefits and more lenient underwriting criteria.

  1. Coverage for normal childbirth is included. This is the only option that provides this sought after benefit.
  2. Medical and financial underwriting is less intensive. Carriers are less concerned about adverse selection when multiple people might enroll. Employers can verify income and employment.

Individual Short-Term Disability Insurance Providers

Many short-term disability insurance providers offer policies to individuals. However, the marketplace breaks out differently than many prospective buyers expect.

For example, many insurance companies focus exclusively on health care. They do not offer income protection. However, Auto insurers do for car crashes. Another category markets personal plans at the worksite. The smallest segment markets outside of employers. Finally, group providers sometimes allow conversions.

Health Insurance Carriers

Most traditional health insurance carriers do not offer short-term disability coverage. Their individual medical insurance plans reimburse doctors and hospitals for care. However, they do not replace income.

If you only have health care coverage through one of these carriers, chances are high that you do not have income replacement benefits.

AetnaAmerican FamilyBlue Cross Blue Shield (BCBS)
CignaKaiserUnited Healthcare

Auto Insurance Companies

Many auto insurance companies offer a limited form of personal short-term disability coverage. Personal Injury Protection (PIP) is a mandatory feature in thirteen states, and optional elsewhere. PIP covers medical expenses and lost income resulting from an automobile accident.

Prospective buyers with any of these companies should know that their coverage applies only to injuries inflicted by a moving automobile.

AAAGeicoLiberty Mutual

Private Purchase Providers

The number of providers offering private short-term disability plans for direct purchase is relatively small. Most carriers shy away from this market, and independent agents focus on other forms of coverage. The level of self-selection and complex underwriting requirements make it difficult for them to succeed.

Here are the providers we can identify that appear to market privately.

DesjardinsFarm BureauGreat West Life
Mutual of OmahaMet LifeNorthwestern Mutual
State Farm

Personal Worksite Companies

Personal short-term disability companies offer plans through the worksite. The worksite is a more favorable environment to sell coverage, as the employer can verify income and help minimize self-selection risk. This is why you will find more carriers in this category.

Here are the companies we can identify that only sell personal plans at the worksite that are portable. The carriers listed in the section above also offer worksite plans with portability features.

AflacColonial LifeHumana
The HartfordUNUM

Group Converting to Individual

Group-based short-term disability companies also offer plans at the worksite. However, the employer owns the policy, not the individual employee. Obtain this type of plan if you expect to stay with your current employer for a long time.

Workers can sometimes convert a group policy into a private or personal plan when separating employment. Check the legal language on conversions very carefully. If you have coverage with one of these carriers, you may or may not be able to continue on your own outside of your employer.

American FamilyGuardianLiberty Mutual
Lincoln FinancialNationwideReliance Standard