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U.S. Disability Insurance Market Revenue to Attain USD 3.57 Bn by 2033
10 Dec 2024
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U.S. Disability Insurance Market Revenue and Trends 2023 to 2033
The U.S. disability insurance market revenue surpassed USD 1.34 billion in 2024 and is predicted to attain around USD 3.57 billion by 2033, growing at a CAGR of 11.69%. The rising workforce with disabilities and the increasing demand for personalized insurance products are expected to boost the growth of the U.S. disability insurance market.
Market Overview
Disability insurance, also known as disability income insurance or disability income protection, is the type of insurance coverage that provides financial protection to individuals who are unable to work due to disability. Disability insurance replaces a portion of individual income to meet their living expenses, medical bills, and other financial responsibilities. Disability insurance offers a source of income to individuals who are unable to earn due to disability caused by illness or injury and provides several policies that can vary in terms of coverage, benefits, and waiting periods.
The rising need for financial protection and awareness of potential risks related to disabilities are driving the market growth. The rising healthcare expenditures create a burden on individuals having disabilities, significantly boosting the demand for disability insurance. In addition, the rising aging population contributes to market growth. Older people are more prone to diseases, which may lead to disability. The increasing awareness regarding safeguarding finances positively impacts the U.S. disability insurance market.
According to a report published in 2024, as of 2022, 14% of the U.S. population had some type of disability, and it is more common among older individuals, with around 46% of those aged 75 years and older.
Report Highlights of the U.S. Disability Insurance Market
By insurance type, the employer supplied disability insurance segment dominated the market with the largest share in 2023. This type of coverage is provided by employers to their employees as a benefit. It is often referred to as group disability insurance or employer-sponsored disability insurance. It offers a commitment to employees' well-being and provides financial security.
By coverage type, the long-term disability insurance segment led the market in 2023, as it provides income replacement for a longer period, ranging from years until the individual attains retirement age. It replaces a portion of the individual's income when they are unable to work due to disability and provides financial stability for an extended period.
By end-user, the enterprise segment registered dominance in the market in 2023, as many enterprises, including small and large, offer disability insurance for employee benefits. They offer a range of health insurance, retirement plans, and wellness programs that attract individuals with disabilities.
U.S. Disability Insurance Market Trends
Rising Awareness of Benefits of Disability Insurance Plans: The market is experiencing rapid growth as more people are becoming aware of the advantages of disability insurance. In addition, the rising demand for automated claim technologies speeds up the claim process, lowers the operating cost, and improves the client experience, positively impacting the market. Moreover, the changing consumer preferences and the demand for customized health insurance plans contribute to market expansion.
Increasing Prevalence of Chronic Diseases: The rising prevalence of chronic diseases among the geriatric population plays a significant role in boosting the growth of the market. Older people are more prone to chronic diseases, which may lead to disability. Also, unhealthy eating habits, lack of exercise, and several other factors lead to chronic conditions. According to a report published by the U.S. Department of Health and Human Services in 2024, an estimated 129 million people in the U.S. have at least one major chronic disease such as heart disease, cancer, diabetes, obesity, and hypertension.
Rising Government Support: Favorable government support for disability insurance contributes to the growth of the market. Many governments across the world are implementing laws that mandate employers to provide workers with insurance, which ensures that the individual with a disability will be provided with some financial insurance. Some governments also provide tax breaks to people who have a disability. For instance, the Civil Rights of Institutionalized Persons Act (CRIPA) of 1980 is a U.S. federal law intended to protect the rights of people in state or local correctional facilities, nursing homes, mental health facilities, group homes, and institutions for people with intellectual and developmental disabilities.
U.S. Disability Insurance Market Coverage
Report Attribute
Key Statistics
Market Revenue in 2024
USD 1.34 Billion
Market Revenue by 2033
USD 3.57 Billion
CAGR
11.69% from 2024 to 2033
Quantitative Units
Revenue in USD million/billion, Volume in units
Base Year
2023
U.S. Disability Insurance Market Key Players
Aviva plc
AXA Group
Zurich Insurance Group
Guardian Life Insurance Company
Petersen International Underwriters (PIU)
MetLife Services and Solutions, LLC
Asteya
AEGON N.V.
Nippon life insurance
Assurity Group, Inc.
Market News
In September 2024, Sun Life, a leading provider of insurance and employee benefits in the U.S., launched an enhanced claim integration system that allows members to file a single claim to cover multiple benefits, simplifying the process and expanding access to crucial coverages. It also aims to streamline the complicated process of filing claims for different benefits. It mainly features three major business lines such as disability, supplemental health, and dental coverage.
In June 2024, Juno launched its first-of-its-kind child disability insurance in the U.S. and began selling coverage as a workplace benefit in companies of 200 or more workers. Through Juno, parents can receive up to $1 million ($500,000 per qualifying child), paid in monthly installments for up to 10 years. The benefit covers children from birth to age 26 and can be used in any way a family chooses, including supplementing lost income, hiring specialized caregivers at home, or addressing medical costs not covered by health insurance. Juno also provides personalized support services to help families navigate the complexities of their child’s condition, access other available resources, and build a successful plan.
Market Segmentation
By Insurance Type
Individual Disability Insurance
Business Overhead Expense Disability Insurance
High Limit Disability Insurance
Employer Supplied Disability Insurance
Others
By Coverage Type
Short Term Disability Insurance
Long Term Disability Insurance
By End User
Government
Enterprise
Individual
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