Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Do Employers Have to Pay Disability Insurance for Employees

Employers do not have to pay for disability insurance for their employees. In fact, it is much more beneficial for employees to pay for their own disability insurance premiums.

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When the employee pays 100% of the premium, all benefits that are paid out on the policy are tax-free. If an employer pays a portion of the premiums, the same percentage of the benefits is taxed as earned income.

Therefore, if your company offers disability insurance coverage, insist that it is 100% employee paid or take out your own individual policy.

Why Disability Insurance is So Important

Disability insurance is extremely important for workers to carry because:

  • 3 of 10 people will need such coverage before retirement
  • 90% of accidents and illnesses that result in disability are not related to work

Therefore worker’s compensation will not apply. A huge portion of today’s workforce will face the need for disability insurance before they retire, so not carrying it is a bad idea.

Many American families live little more than paycheck to paycheck, in fact about 70% of them. This means that if one of the main providers in a household becomes disabled, it is very likely that the family will be unable to meet its financial obligations very quickly. Ask yourself how long you could pay your bills if your income disappeared. This will show you just how important disability insurance is to you personally.

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Employer Sponsored Versus Individual Disability Insurance

As with many types of insurance, disability insurance is offered in group plans sponsored by your employer. Alternatively, it is always available through an individual plan. If you are young and in outstanding health, you may find that individual insurance is by far the best price. If your health is not as good, you are likely to discover that it is impossible to get individual coverage. However if you belong to a group, you can get disability insurance that way.

One of the big advantages of individual disability insurance is the fact that you get to customize your coverage. You will be able to select different things about your plan, like the length of the waiting period and whether or not you will choose an occ-only plan or one that makes you work doing anything if you are capable. You will also be able to choose how long the benefits will be paid out after you become eligible. This type of policy can follow you wherever you move.

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Get Disability Insurance Now

If you are concerned about disability insurance, you should look into taking it out as soon as possible. Your chances of needing disability insurance at some point in your life is very high.The problem with being out of work and not having a steady income is that problems spread to all parts of your life.

  • 1 worker in 7 will find himself out of work on disability for 5 years or more
  • The leading cause of foreclosures is disability
  • The norm for being out of work on disability is 2.5 years

Therefore, you should take the time to investigate this very important type of coverage.

Compare disability insurance rates now!

You can get a variety of quotes on disability insurance quickly and easily but using the free online quote tool. Input your information and the tool will submit it to multiple companies offering disability insurance in your area. Then, start to narrow down the list of possibilities based on price.

However, finding good disability insurance is about more than just price. You will want to compare carefully and make sure the quotes are for similar benefits. In addition, be extremely wary of quotes that are significantly lower than all the others because chances are they have exclusions or something else that other quotes do not have.

Check into the financial strength of the company you are planning to get your policy with. You do this by getting the company’s grade from one of the leading independent insurance rating companies like A.M. Best or Moody’s. If they are financially strong enough to still be around in several years, when you may need them, you might want to pick that company over another.

Check how the insurer treats its customers by doing a quick online search for reviews or complaints about the specific insurer. You may also check the insurer’s complaint record through the department of insurance in your state.

Take the time today to secure your future. Start comparing disability insurance rates now!