Disability insurance is often overlooked in financial planning, yet it is a crucial aspect of safeguarding one’s income and financial security. While federal employees have disability retirement benefits through FERS and CSRS, short term disability insurance is not available through the federal government. Many choose to purchase this supplemental disability coverage that offers protection for their finances when faced when an unexpected disability.

This post explores the key features of supplemental disability insurance plans specifically designed for federal employees, how to compare these plans, and what to consider to ensure optimal coverage and financial protection.



Understanding Supplemental Disability Insurance

Supplemental disability insurance, also known as supplemental income protection insurance, is designed to protect individuals in the event of an unexpected illness or injury. These plans offer financial support to cover expenses such as medical bills, mortgage payments, and everyday living costs during periods of disability.

Federal employees may be eligible for disability retirement depending on the length of time they’ve been employed through the federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). While these programs provide coverage for individuals who are considering retirement due to a disability, they do not apply to federal employees who plan to continue working after they’ve recovered. Supplemental disability insurance helps fill this gap and ensures that federal employees maintain their standard of living even if they’re unable to work due to a short term disability.



Top Things to Consider When Purchasing Disability Insurance


Coverage Limits and Benefit Amounts

Ensure the plan provides sufficient benefits to cover the difference between your regular salary and what is offered by federal disability retirement benefits. Determine the maximum benefit amount the plan offers. Look for plans with higher limits to ensure adequate coverage in case of a severe disability.


Benefit Period

Your benefit period is the length of time the policy will pay benefits after the onset of disability. Deciding on which benefit period works best for you depends upon a variety of factors, including how long you determine you could endure financially from an  extended period off work, and the cost of the policy.


Definition of Disability

Pay attention to how disability is defined in the policy. Look for “own occupation” policies which provide benefits if you are unable to perform your current federal job, as opposed to any job. Some plans use “own-occupation” definitions while others use “any-occupation” definitions, which require you to be unable to work in any occupation for benefits eligibility.


Waiting Period (Elimination Period)

Also known as the elimination period, this is the duration you must wait after becoming disabled before benefits start. Shorter waiting periods mean quicker access to benefits but may come with higher premiums. Understand the time between the onset of disability and when benefits begin.



Compare premiums to find a balance between cost and coverage. Premiums are influenced by your age, job role, and the benefits package you select.



Ensure the policy is renewable without medical underwriting, guaranteeing continued coverage even if your health deteriorates.


Underwriting Requirements

The underwriting process, including medical exams and health assessments, can differ among carriers and may affect eligibility and premiums. Consider a guaranteed-issue plan that does not require you to answer any medical questions, which can make the process of applying for coverage easier and faster.



Comparing Plans and Carriers for Federal Employees

Comparing supplemental disability insurance plans can be a daunting task, but it’s essential to conduct thorough research to find the best fit. When comparing supplemental disability insurance plans, federal employees should do as follows:


Evaluate Existing Benefits

Knowing what your current policy covers can help identify where additional coverage is needed. Start by understanding the disability retirement options you already have available to you under FERS or CSRS. Unless you plan to retire early, you need to consider a short term disability policy to protect your income while you are unable to work.


Identify Gaps

Assess gaps in your current disability coverage, including potential income loss and uncovered expenses.


Coverage Needs

Evaluate your financial situation, including income, expenses, and existing insurance coverage, to determine how much supplemental coverage you require.


Research Insurers

Look for insurance companies that specialize in or are familiar with federal employment. Carriers like MetLife and The Standard are known for offering products tailored to government employees.


Carrier Reputation

Research the reputation and track record of insurance carriers, including their financial strength, claims-paying history, and customer satisfaction ratings.


Policy Features

Assess the specific features, riders, and benefits offered by each plan to ensure they align with your needs and preferences.


Get Quotes

Obtain detailed quotes that outline coverage specifics, exclusions, and costs. Make sure these are tailored to federal employment circumstances.


Renewability and Portability

Check whether the policy is renewable and portable, allowing you to maintain coverage even if you change jobs or experience changes in health status.


Seek Professional Advice

Consider consulting with a financial advisor or a benefits specialist who understands federal benefits to help navigate the options.



Top Plans and Providers

Several insurers offer products tailored to the unique needs of federal employees. It’s beneficial to explore offerings from carriers that understand the intricacies of federal benefits and how supplemental disability insurance can work alongside those benefits.

While the “best” supplemental disability insurance plan varies depending on individual needs and preferences, several factors contribute to the overall quality of a plan:


  • Comprehensive Coverage: Look for plans that offer broad coverage, including benefits for total and partial disabilities.
  • Flexible Options: Choose plans that allow customization with optional riders and features to tailor coverage to your specific needs and budget.
  • Strong Financial Ratings: Select plans from carriers with high financial strength ratings from independent rating agencies such as A.M. Best, Standard & Poor’s, and Moody’s. This ensures the insurer’s ability to fulfill its financial obligations and pay claims promptly.
  • Positive Reputation: Consider feedback and reviews from policyholders regarding the carrier’s customer service, claims processing efficiency, and overall satisfaction.
  • Competitive Pricing: Seek plans with affordable premiums relative to the level of coverage and benefits provided.



Understanding Plan Differences

When examining different supplemental disability insurance plans, federal employees should be aware of:

  • Benefit Syncing: How well does the supplemental plan integrate with existing federal disability benefits?
  • Portability: If you leave federal service, can you take your supplemental insurance with you?
  • Exclusions and Limitations: Are there specific conditions or circumstances that are not covered by the plan?




For federal employees, securing supplemental disability insurance is a strategic decision that enhances your existing federal benefits. Always take time to review your coverage periodically and adjust as your needs change to ensure continuous protection throughout your career and beyond.