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Choosing Disability Insurance for Self-Employed Individuals

Protect your income from illness or injury disruptions

Updated March 10, 2023

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As a self-employed or gig economy worker, it may be tough to imagine a scenario where you are unable to work and provide for your family, but unfortunately, short-term or long-term disability may be more common than you expect.

According to the Social Security Administration, one in four 20-year-olds will become disabled before the age of 67. The Insurance Information Institute says 43% of folks ages 40 and older will have a disability event, for 90 days or longer, by age 65. These alarming statistics confirm the importance of disability insurance, particularly among self-employed or gig economy workers who may not have coverage through an employer.

We compared 15 of the top disability insurance providers, analyzing company history, reputation, coverage, waiting periods, and more to find the best insurers for self-employed workers. Here's what to know before shopping for a policy.

The Best Disability Insurance for Self-Employed Individuals

Best Overall: Northwestern Mutual
Best Plan Customization: Guardian
Best Short-Term Disability: Mutual of Omaha
Best Long-Term Disability: MassMutual
Best For Ease of Online Application Process: Breeze
Best for the Socially Conscious: Assurity

Best Overall : Northwestern Mutual

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Northwestern Mutual earns our ranking as best overall because of the company’s financial strength, long-standing reputation, and solid track record for customer service. As a self-employed or gig economy worker, you may customize your disability insurance policy to meet your family’s needs.

Pros

Financial strength and reputation
Strong customer service
Customizable disability plans

Cons

No online quotes
Must speak with a local agent
Agents earn commission.

Northwestern Mutual is a well-known insurance company with standout customer service. The company has been in business since 1859, making it the second-oldest on our list. Northwestern Mutual has an A++ financial strength rating from AM Best.

Northwestern Mutual was an easy pick for our top spot based on the company’s long history, financial strength, and strong reputation for customer service. The company also offers plenty of customization options, including policies for your part-time or stay-at-home spouse. There is also own-occupation coverage specifically for self-employed folks in specialized fields such as medical professions. Some policy features may not be available in all states.

In 2019, the company reduced the underwriting timeline for some disability insurance applications from 28 days to a single day, and its new technology allows some applicants to bypass medical tests.

You may begin the claims process by calling Northwestern Mutual or filling out the company’s online form. You will receive a claim kit by mail within two to three business days, or you may receive it by email with 24 hours. Once you submit your claim kit, they may reach out to you for additional documents or information. The company aims to make a claims decision within 30 days of receiving all required information, and they will provide you with periodic updates during the process.

Unfortunately, you can’t get a disability insurance quote online. Use the website to find a local insurance agent to learn more about the company’s policies (agents may earn a commission). Your policy details—including the definition of disability, percentage of income, waiting period, and riders—will be customized based on your conversation with an agent.

Best Plan Customization : Guardian

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Guardian is our choice as best for customization because of the company’s many plan options. You may have several waiting periods and riders to choose from, making it easy to craft a policy that is well-suited for your family’s unique needs.

Pros

Financial strength and reputation
Fast online quotes
Ability to customize policy

Cons

Limited underwriting and claims transparency
Must finalize process through representative

Guardian is another well-established insurance provider and has been around since 1860, with a strong reputation and multiple financial products. Guardian has a financial strength rating of A++ with AM Best.

It is licensed to do business in all 50 states, but some product features aren’t available everywhere. The company offers short-term and long-term disability insurance for self-employed and gig economy workers.

Guardian offers a fast online quote, including the option to see pricing for add-on riders like residual disability and a cost of living adjustment. Guardian’s disability plans offer many options for customization, giving it an edge over the competition. One unique customization is the ability to add extra monthly benefits to cover your student loan payments—$1,000 for undergraduate loans, $2,000 for graduate student loans, or $2,500 for those working toward or holding a doctoral degree.

You may also add features like a waiver of premium, hospice care benefit, unemployment premium suspension, and the ability to access occupational rehabilitation benefits. You may further customize your disability policy with riders like partial disability, retirement protection, cost of living adjustments, and more.

Some riders, such as the future increase option and unemployment waiver of premium, may offer protection through various life events and situations.

The disability insurance claims process is started by calling Guardian’s team.

Best Short-Term Disability : Mutual of Omaha

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We chose Mutual of Omaha as best for short-term disability insurance—particularly if you’re looking for a flexible policy. These policies offer built-in benefits—like a total disability income benefit, partial disability, guaranteed renewable, and more.

Pros

Quick online quote
Waiting periods as little as 30 days
Options to customize

Cons

Must buy a policy through an agent

Founded in 1909, Mutual of Omaha has become a respected name in the insurance business and holds a financial strength rating of A+ from AM Best.

To qualify, you must be between 18 and 61 and work at least 30 hours per week. You may buy an individual short-term or long-term disability insurance policy through Mutual of Omaha, but some policy options may not be available in all states (agents may earn a commission).

If you’re self-employed and looking for a robust short-term disability policy, Mutual of Omaha beats the competition with built-in benefits. Both accident—which you could potentially access immediately—and illness are more flexible than some other providers, and Mutual of Omaha offers a 15% discount to policyholders with two or more years of self-employment.

Basic quotes are available online, but you need to complete the application process by speaking with an agent. You may qualify for monthly benefits of up to $20,000 and eliminate long waiting periods for short-term issues. These policies are guaranteed renewable until age 67.

The company also offers Priority Income Protection that has a shorter, easy-to-understand application with approval in a few days. There is no medical exam for this policy, but you will have longer waiting periods, and the maximum benefit is $2,000 per month.

Best Long-Term Disability : MassMutual

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When you’re applying for long-term disability insurance, you may need a policy that will reliably pay benefits until retirement. MassMutual’s long-term disability insurance offers up to 65% income replacement, which is a higher percentage than competitors.

Pros

Company longevity
Financial strength
Income replacement up to 65%

Cons

No online quotes
Must speak with a local agent

Founded in 1851, MassMutual is one of the oldest and most respected insurance companies among those we reviewed. Self-employed workers may rest easier knowing MassMutual has earned an A++ rating with AM Best, the company’s highest financial strength rating.

MassMutual is an easy pick for the best long-term disability insurance. Few companies have the same longevity, financial strength, and reputation, along with higher income replacement. Self-employed individuals have the option to get up to 65% income replacement, making this company stand out from the competition.

MassMutual offers several options to customize your long-term disability policy as well. Depending on where you live, you may have access to riders like automatic benefit increases, catastrophic disability, and future insurability options.

MassMutual’s website features a calculator to see how much coverage you may need, but unfortunately, there isn’t an option to get an online quote. To learn more, you need to contact a local insurance agent (these agents may earn a commission for recommending a policy).

The claims process is similar to other companies on our list. You may start the process by calling MassMutual, and the company will send you a claims packet. You may submit the packet by email, mail, or fax.

Best For Ease of Online Application Process : Breeze

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Breeze made our list because of the company’s online quotes and fast application. You can complete the application process 100% online. Self-employed workers may receive a quote, submit an application, and get covered within minutes from your phone or computer. Breeze also offers underwriting transparency for self-employed and gig-economy workers, whereas you may have to call for these details with competitors.

Pros

Fast online quote and application
Possible fast decision
No commissioned sales agents

Cons

Newer company
Breeze only offers disability and critical illness insurance.

Founded in 2019, Breeze is the youngest provider on our list. Although Breeze is newer, the company uses Assurity Life Insurance to underwrite its policies—Assurity has an A- financial strength rating from AM Best.

Breeze offers short-term and long-term disability insurance policies for business owners, partners, or freelancers. If you know what you want and like getting everything online, Breeze surpasses the competition with how the application guides you to what you need.

The company can recommend a disability benefit period and waiting period based on your situation. If you’re applying for $5,000 per month or less, you may even skip the hassle of a medical exam. Younger, healthier applicants and non-smokers often get a decision instantly.

Online quotes are transparent and make it easy to see what your disability insurance policy may include, along with whether you need a medical exam to qualify. Breeze uses automated underwriting—which may speed up the decision for some applicants. After starting the application, Breeze has a fully-staffed support center where you can speak with a representative by phone if you run into a problem. You can also email the support team.

Policy features may vary by state.

Best for the Socially Conscious : Assurity

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Assurity earned our ranking because of the company’s commitment to purpose-driven work. The company became the world’s biggest insurance provider to become a Certified B Corporation in 2015, which affirms Assurity has a social and environmental mission, along with its responsibility for governance, employees, and the community.

Pros

Company longevity and reputation
Easy online quote
Coverage for high-risk professionals

Cons

Must buy the policy through an agent
Slower underwriting

Assurity has been around since 1890 and has spent over a century building a strong reputation. As such, the company has earned an A- financial strength rating from AM Best.

If you’re a self-employed worker with an interest in social justice, environmentalism, and corporate impact, Assurity may be worth considering because it is the only provider listed that has become a Certified B Corporation. This means that the company doesn't just deliver on its disability insurance promise, but that it does so with a mission to work toward social and environmental causes.

Assurity offers individual short-term disability insurance, although you may not have access to all features in every state. You can get a quick online quote by answering a few simple questions, such as your age, gender, and occupation (and you select from a comprehensive list of occupation titles). Their list of occupations even includes some professions which may be more difficult to insure.

The quote tool also allows you to see the cost of add-on benefits like the own-occupation definition of disability, automatic benefit increases, guaranteed insurability, and residual disability.

Unfortunately, the underwriting process may take longer than some competitors, and the claims process may not be fast, either. The claims process is started by downloading a disability claim package from Assurity’s website, where you can then call the company with questions.

What Is Disability Insurance for Self-Employed?

Self-employed disability insurance may offer income protection if you aren’t able to work due to illness or injury. There is public disability insurance—like benefits through the Social Security Administration and some state programs—or you may buy a private policy through an insurance company.

One of the biggest differences between self-employed disability insurance and a workplace plan is you may buy an individual policy versus being part of a group policy—which may be more expensive. If you prefer a group policy, you may still have access through your spouse’s company plan or professional organizations.

Although an individual policy may cost more, you may have more flexibility. For example, you may be able to select your coverage options—like the policy’s definition of disability, the waiting period, riders, and more.

What Is the Difference Between Short-Term and Long-Term Disability?

There are two types of disability insurance: short-term disability and long-term disability. Long-term disability insurance may have a waiting period—also called the elimination period—of several weeks to several months, with benefits lasting from a few years to retirement. Short-term disability insurance may have a waiting period of zero to two weeks, with benefits lasting up to two years.

While long-term disability insurance with benefits lasting until retirement may offer the ultimate protection, you may want to protect yourself with a short-term policy, too. Typically, you may pay higher premiums for shorter waiting periods and a longer benefits payout period.

For an extra fee, you may also look at a noncancelable policy—which means the insurance company can’t cancel the policy for any reason except for not paying the premiums. Another policy option, guaranteed renewable, also means the provider can’t cancel your policy, but the insurance company may increase premiums for a group of insured folks (also known as the same rating class).

You may also pay more for extra riders, which may boost your disability coverage like cost of living adjustments (COLA), residual benefit or partial disability, the return of premiums for no claims, waiver of premium for disability, and more.

Can You Go on Disability If Self-Employed?

You may qualify for disability benefits through the Social Security Administration. The problem is, these federal monthly benefits may be tough to qualify for. There are no federal benefits for partial or short-term disability. The SSA assumes you may cover a period of short-term disability with other insurance, workers’ compensation, savings, or investments.

To qualify, you must meet the “any occupation” definition of disability, which means you can’t do the work you did before—or any other job—because of your medical condition. Also, your condition must have lasted or be expected to last at least one year or result in death.

Depending on where you live, you may be eligible for state disability insurance to cover your short-term inability to work because of an illness, injury, or pregnancy. For example, California offers these benefits—but they aren’t available in all states.

What Are the Costs of Disability Insurance for Self-Employed?

Several factors may impact the cost of self-employed disability insurance. These include the definition of disability, benefit period, percentage of income replacement, waiting period, a non-cancelable or guaranteed renewable policy, and various riders to improve your coverage further. Your monthly premiums may also vary based on your age, gender, location, health, and tobacco use.

The most expensive definition of disability is “own-occupation”—which offers benefits if you can’t work your current job—whereas “any occupation” is the least expensive. You will also pay more for shorter waiting periods—like 30 days versus 90 days—because you may start receiving benefits sooner. You will pay more for non-cancelable (guaranteed renewable policies) or additional benefits through contract riders.

As a self-employed or gig economy worker, you’re on the hook for your own benefits. These may include health insurance, saving for retirement, taking time off, and disability insurance—and it can be challenging to distinguish one company from the next. Remember, finding the right self-employed disability insurance may be particularly challenging, as the monthly premiums may be costly for the solo worker.

Businesswoman in wheelchair leading group discussion about disability insurance for the self-employed — MoMo Productions / Getty Images

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