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Individual disability insurance is a policy you apply for and own. It is not the booklet that comes with a job. Most people who buy one should start with simplified-issue coverage. A fully underwritten, high-limit contract is a different file.
Group long-term disability is a start when you have it. It is often taxable, capped at base salary, and gone when you leave. Insurance Geek is an independent agency in Columbus, Ohio. We have placed disability coverage since 2004. Use our digital tools to quote, shop, and compare disability insurance across 30+ A-rated carriers, then a licensed agent finishes the file. Here is what individual coverage is, who it is for, and when we move past a $3,000 monthly benefit.
Key Takeaways
You own it. Individual disability insurance stays with you if you change jobs, as long as you pay the premium.
Not automatically full underwriting. Most individual buyers should start with simplified-issue coverage, not a specialist exam file.
The usual cap. Simplified-issue benefits commonly run up to about $3,000 a month. That is enough for most household bills.
The upgrade. Fully underwritten individual coverage is the next step when income needs more than that cap.
Group is separate. An employer plan can sit beside an individual policy. It is not the same product.
What is individual disability insurance
Individual disability insurance is income protection you buy in your own name. You answer the application, you pay the premium, and you keep the contract if you leave an employer. The monthly benefit is set at issue. The definition of disability and the benefit period are written into that contract, not into a group booklet that can change at renewal.
It is still disability insurance. The word individual only tells you who owns it. It does not tell you the underwriting path. A simplified-issue policy and a $10,000 own-occupation policy are both individual. They are not the same quote.
Individual vs group disability insurance
Group coverage is usually cheaper because the employer pays part or all of the premium. When the employer pays, the benefit is often taxable. Many group plans use your occupation for about 24 months, then switch to any occupation. Coverage typically ends with the job.
| Term | Individual policy | Typical group plan |
|---|---|---|
| Who owns it | You | The employer |
| If you change jobs | Stays with you | Coverage ends |
| Income counted | Earned income, up to the issue limit | Often base salary only |
| Benefit tax | Usually tax-free if you pay with after-tax dollars | Often taxable |
| Underwriting | Simplified-issue or fully underwritten | Little or no individual underwriting |
If you already have a group plan and need a second check, that stack is on the supplemental disability insurance page. This page is the policy you buy as the primary contract, or as the portable one you keep.
Two individual paths: simplified-issue and full underwriting
Most households should be quoted simplified-issue DI first. Illinois Mutual's Personal Paycheck Powered is the model we use for that class. Monthly benefits commonly run from about $200 to $3,000. Rates are unisex and uni-tobacco. Coverage is on or off the job. A fast application is available on many of those cases. That is not a promise on every file. Availability depends on the state, the occupation, and the carrier's current rules.
Fully underwritten individual DI is the other path. Those cases can issue around $10,000 a month for many occupation classes. They take longer. They ask more about health, income, and occupation. They are the right file when the bills need more than $3,000 a month. They are the wrong first quote for a household whose mortgage and groceries fit inside the smaller cap.
Premiums and what moves them live on the disability insurance cost page.
Expert Tip: Individual does not mean full underwriting
If you are buying your own disability policy, start with simplified-issue coverage. Do not assume individual means a high-limit exam file. Most household bills fit inside about $3,000 a month. I move the case to full underwriting only when that cap cannot cover the paycheck you actually need.
—Brad Cummins, Insurance Geek Founder
Who individual disability insurance is for
Individual disability insurance is for people who need a benefit they control. Self-employed people with no group plan, W-2 employees whose certificate is thin or taxable, and anyone who expects to change jobs are the usual yes.
Usually the right buy
- You have no group plan, or the group plan would not cover the bills
- You would lose employer coverage if you left the job
- The monthly bills fit inside a simplified-issue benefit
- You can pay the premium with after-tax dollars and keep a tax-free benefit
Usually the wrong first file
- You already own portable coverage that replaces income through retirement age
- The first quote is a $10,000 own-occupation file and the bills do not need it
- There is no earned income to insure
- The premium would come out of money required for current bills
Specialists who need more than $3,000 a month still buy individual coverage. They just buy the fully underwritten version. That definition question is on the long-term disability insurance page.
How to buy individual disability insurance
Bring the monthly bills you would still owe if work stopped, plus any group certificate you have. We size the benefit to that number. If it fits inside about $3,000 a month, we shop simplified-issue coverage first. If it does not, we shop a larger individual contract.
Illinois Mutual is the example for the first path, not the only carrier we shop. We still run the case across the market that fits the file.
Compare individual disability coverage
The form starts with the benefit size that fits most household bills. We only open a larger underwriting file when that cap is too small.
Conclusion
Individual disability insurance is the policy you own. It is not automatically a specialist contract. Most people should start with simplified-issue coverage that can replace the bills up to about $3,000 a month. Full underwriting is the upgrade when that cap cannot do the job.
Our agents see people quoted a high-limit file because the word individual got treated like a product type. Bring the bills. We will match the contract to that number and show the larger policy only when the smaller one cannot cover it.
FAQ
Disability Insurance
We can size an individual policy to your bills.
As an independent agency, we shop simplified-issue disability coverage first, then a larger fully underwritten policy only when that monthly benefit is too small.
See My Numbers
About Brad Cummins
Brad Cummins is the founder of Insurance Geek and primary author of its educational content. Licensed since 2004, he brings over 21 years of experience structuring life insurance and IUL strategies for clients nationwide.
Fact checked by Ryan Wood
Ryan Wood is a licensed insurance professional and contributing advisor at Insurance Geek, serving as a fact checker and technical reviewer for life insurance and annuity content. First licensed in 2013, he brings more than 12 years of experience and holds licenses in over 40 U.S. states.
