Disability Insurance for Software Engineers

This page is for a software engineer buying individual disability insurance before a disability happens, not one appealing a denied claim. It covers the buying decision only, not how to file, prove or appeal a claim afterward.

Individual disability insurance for software engineers, sometimes called income protection, is a personally owned policy that replaces income when an engineer cannot perform the material and substantial duties of their occupation. It is separate from any group long-term disability plan an employer provides, and it stays in force through a layoff, a resignation or a move to another company. Coverage is non-cancellable and guaranteed renewable to a stated age, so the carrier cannot cancel the policy or raise the premium while premiums are paid.

Five carriers write the individual policies this page compares. Ameritas (Ameritas Life Insurance Corp., policy form 4501NC), Guardian (Berkshire Life Insurance Company of America, policy form ICC16 18ID Provider Choice), MassMutual (Massachusetts Mutual Life Insurance Company, Radius Choice ICC15-XLIS-RC), Principal (Principal Life Insurance Company, Income Protector ICC22-800-IDI), and The Standard (Standard Insurance Company, Platinum Advantage B180(7/17)). Lloyd’s of London, placed through Petersen International Underwriters, adds excess coverage above what the five carriers issue individually.

The policy pays independently of Social Security Disability Insurance. It is also not key person disability insurance, which protects a company’s finances rather than the engineer’s own income.

The Social Security Administration’s Office of the Chief Actuary projects that an insured worker who attains age 20 in 2025 has a 24% probability, just under 1 in 4, of becoming disabled before normal retirement age (Actuarial Note 2025.6). A software engineer’s earning power rests on sustained concentration, vision and the use of the hands, and a condition that takes away any one of them can stop the work while the engineer is otherwise well.

The larger exposure is how the pay is built. An engineer’s compensation arrives as base salary, an annual bonus and restricted stock units that vest on a schedule. A group long-term disability plan pays a percentage of the earnings its covered-earnings clause names, and plans differ on whether that clause reaches bonus, commission or equity. Restricted stock units vest as shares rather than arriving in a paycheck, which leaves the plan document as the only place to learn whether they count.

Equity also ties an engineer to the employer. The group plan ends with the job, and a grant agreement decides what happens to unvested shares. An engineer who is ill, or who leaves because of a health condition, can lose the employer’s coverage and the unvested equity in the same month. An individual policy belongs to the engineer, so it is the one piece of protection that does not depend on staying employed.

The question that matters most to an engineer paid in stock is whether an individual carrier counts restricted stock units as insurable income. Two of the five carriers print a rule. Guardian (Berkshire Life Insurance Company of America) counts RSU compensation when it is a regular feature of income: earned for the last two years, expected to continue, with no change of employer or business in those two years. MassMutual (Massachusetts Mutual Life Insurance Company) counts RSUs that appear in W-2 wages as taxable income and averages them over two years, as the table below sets out, provided the employer’s plan has been in place at least three years.

Ameritas, Principal and The Standard print no RSU rule in the documents on file. That does not mean they exclude the income; it means an engineer whose pay is largely RSUs has to confirm the treatment with the carrier before applying. Salary and bonus have a printed rule at four of the five carriers, and the table shows each one.

The practical result is a different insurable income from the same W-2. At Guardian and MassMutual an engineer can document RSU income toward the benefit under the stated conditions, and at the other three carriers the treatment has to be confirmed before the RSU income can be counted on.

How Carriers Count Stock and Bonus Pay for Software Engineers

Source: producer-facing field underwriting and product guides held by Set for Life Insurance for Ameritas Life Insurance Corp., Berkshire Life Insurance Company of America underwriting for Guardian (Field Underwriting Guide, Section 9), Massachusetts Mutual Life Insurance Company, Principal Life Insurance Company, and Standard Insurance Company, with the Standard sample policy (form B180(7/17)) and the MassMutual underwriting document “DI Underwriting – Restricted Stock Units” (form DI1604, dated 9/24). These figures come from underwriting guidance, not policy contract language, except where the cell names the sample policy. “No rule is printed” means the term was searched in the documents on file and not found; it does not mean the carrier excludes the income, and an engineer paid in RSUs should confirm treatment with the carrier before applying. Underwriting practice can go beyond the printed guides, and a carrier can change or withdraw a program at any time.

Own-occupation coverage pays when an insured cannot perform the material and substantial duties of their occupation, even if the insured is able to work in another one. Ameritas (policy form 4501NC) defines total disability this way: “Totally Disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of your occupation.”

The five carriers deliver this definition differently. Principal builds true own-occupation into the base contract at no added cost. Ameritas offers a true or a modified form in the base contract. Guardian offers a named choice of three definitions in the base contract. MassMutual and The Standard sell true own-occupation only through a separately priced rider, so skipping the rider at either carrier leaves a policy that pays a disability benefit without paying it on an own-occupation basis. Two quotes with the same benefit and the same premium can therefore describe different coverage.

For a software engineer the occupation is the work itself: writing, reviewing and designing software, which depends on sustained concentration, reading and keyboard use. A true own-occupation definition measures the claim against that work, so an engineer who cannot do it but can take a role outside engineering is still totally disabled. A modified definition adds a condition that the insured is not working in another occupation for wage or profit.

Each carrier sorts occupations into classes, and the class is a main input to the limits and the premium that carrier quotes. No guide prints Software Engineer as a stand-alone title. Ameritas, Guardian and MassMutual print no software title and classify the nearest printed title, Systems Analyst or Programmer. Principal lists software developer inside a combined entry, and The Standard lists Software Developer, Senior Software Engineer and Software Architect inside a grouped entry.

The same engineer lands in different classes at different carriers, and each carrier’s class sits on its own scale. Each guide states that classification follows the actual duties and the underwriter’s judgment, not the title alone, so documenting the day-to-day work, the degree and the income matters as much as the title typed on the application. The table shows the title each guide prints, the class reached and what sets it.

Occupation Class by Carrier for Software Engineers

Source: producer-facing field underwriting and product guides held by Set for Life Insurance for Ameritas Life Insurance Corp. (Guide 3), Berkshire Life Insurance Company of America underwriting for Guardian (Field Underwriting Guide, October 2025), Massachusetts Mutual Life Insurance Company (Radius Choice column), Principal Life Insurance Company (Disability Product Guide), and Standard Insurance Company (Product Guide). These figures come from underwriting guidance, not policy contract language, so no policy form ID applies to this table. Each carrier’s class is stated on its own scale and is not equivalent to another carrier’s class; Guardian uses numbers and the other four use letters. None of the five guides prints AI Engineer, Machine Learning Engineer, DevOps Engineer or UI/UX Designer as a title; those roles are classified under the nearest printed title. Each guide states that classification follows actual duties and the underwriter’s judgment, not the title alone. Class assignment is subject to underwriter review at the time of application and varies by duties, employer, education and income documentation.

Residual disability pays a partial benefit when an engineer can still work but earns less because of sickness or injury, such as reduced hours after a repetitive strain injury or a long treatment. The formula matters for an engineer paid in salary, bonus and equity, because each carrier sets its own income-loss threshold, its own benefit formula and its own definition of the prior earnings the loss is measured against. The table compares Ameritas, Guardian, Lloyd’s, MassMutual, Principal and The Standard on the loss threshold, the benefit formula, whether a prior total disability is required, the benefit period and the recovery benefit. It leaves out provisions that apply only to medical specialists.

Residual Disability Benefit Terms by Carrier for Software Engineers

	Ameritas Life Insurance Corp. 4501NC · Enhanced Residual Rider (AERES)	Guardian Berkshire Life Insurance Co. of America ICC16 18ID · Provider Choice + Enhanced Partial Rider	Lloyd’s Petersen International Underwriters PDI111521 · Optional Residual Rider	Mass Mutual Massachusetts Mutual Life Insurance Co. ICC15-XLIS-RC · Extended Partial Disability (EPR)	Principal Principal Life Insurance Company ICC22-800-IDI · Income Protector	The Standard Standard Insurance Company B180(7/17) · Platinum Advantage + Residual Riders
1 · Income Loss Threshold That Triggers Residual Benefits
Minimum income loss required % of prior earnings that must be lost before residual benefits begin	15% loss of monthly earnings (Specimen) One of the lowest thresholds available. Rider text states: loss must be “at least 15% of your prior monthly earnings” due to sickness or injury.	Loss of Income due to disability (Specimen) Guardian’s Enhanced Partial rider defines “Loss of Income” as the difference between Prior Income and Current Income attributable solely to the Injury or Sickness. No explicit percentage floor in the base rider; benefit scales proportionally with income loss. Must be Gainfully Employed.	Optional rider: threshold per rider terms (Specimen) Base Lloyd’s specimen (PDI111521) notes “Residual Disability is an optional benefit that only applies if the rider was purchased.” Rider text not included in this specimen. Typical Lloyd’s/PIU residual riders require income loss and inability to perform all material duties.	20 to 80% loss of Predisability Earnings (Standard) EPR benefit is payable when Monthly Earnings fall to 20% to 80% of Predisability Earnings. Below 20% earnings remaining triggers full benefit. Above 80% earnings remaining, no EPR benefit is paid.	Loss of Earnings from own occupation (Specimen) Principal’s Residual Disability Benefit Rider requires a loss of Earnings due to Disability. The specimen confirms “Earnings” excludes unearned income. No explicit minimum percentage floor; benefit scales pro-rata with the earnings loss ratio.	20% loss of Predisability Earnings (Enhanced); 15 to 20% for Short-Term version (Specimen) Specimen lists Basic, Enhanced, and Short-Term Residual riders. Enhanced Residual: benefit payable when Monthly Earnings are 20% to 80% of Predisability Earnings.
2 · Monthly Benefit Calculation Formula
Residual benefit formula How the monthly residual check is calculated	Residual Monthly Benefit = (Loss of Monthly Earnings / Prior Monthly Earnings) x Base Monthly Benefit (Specimen) First 6 months minimum: The greater of (a) 50% of base monthly benefit OR (b) the formula result. 75%+ loss rule: If loss exceeds 75% of prior monthly earnings, treated as 100% loss and full base benefit is paid. Prior earnings: Average of highest 12-month or 24-month period before disability, indexed annually for CPI-U after year 1.	Partial Disability Benefit = (Loss of Income / Prior Income) x Monthly Benefit (Specimen) Prior Income: Average monthly income for either (a) last 24 calendar months, or (b) the two calendar years with highest earnings in the three years before disability, whichever is greater. Current Income: All income for services during disability, excluding pre-disability earned-but-not-yet-received income. Full benefit floor: If loss of income is 100% or more of Prior Income, full monthly benefit is paid.	Proportional formula: rider required (Specimen) Rider language not included in this specimen. Lloyd’s/PIU residual riders typically use a proportional income-loss formula: (income loss / pre-disability income) x base benefit. Confirm with current rider filing.	EPR Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Monthly Benefit (Standard) Full benefit if earnings are less than 20% of predisability earnings. No benefit if earnings are greater than 80% of predisability earnings. Prior earnings: Average of the 24 months before disability began.	Residual Benefit = (Loss of Earnings / Prior Earnings) x Maximum Monthly Benefit (Standard) Prior Earnings: Average monthly Earnings for the 12 months before disability. Current Earnings: Earnings during the disability period, excludes passive/unearned income. Minimum benefit: Typically 50% of base benefit for first 6 months.	Residual Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Basic Monthly Benefit (Standard) Full benefit trigger: If Monthly Earnings are less than 20% of Predisability Earnings, full Basic Monthly Benefit is paid. Basic Residual Rider: Flat 50% of base benefit when qualifying criteria met. Enhanced Residual Rider: Proportional formula above; includes Recovery Benefit.
3 · Prior Total Disability Requirement: Can Residual Trigger Independently?
Independent trigger Does residual require a prior period of total disability, or can it trigger on its own?	Fully independent: no prior total disability required (Specimen) Ameritas AERES rider states benefits begin the later of: (1) the day after the end of the Elimination Period, OR (2) the day following a period of total disability for which benefits have been paid. Either path is valid. Days of both total and residual disability satisfy the elimination period.	Fully independent: no prior total disability required (Specimen) Guardian’s Enhanced Partial Disability Benefit Rider uses its own Elimination/Accumulation Period. The insured must satisfy the Accumulation Period but does not need to first be Totally Disabled. Residual days count toward satisfying the Elimination Period.	Rider-dependent: verify current rider (Specimen) Lloyd’s specimen confirms residual is an optional rider. The base policy elimination period can be satisfied by successive periods of Total Disability or Residual Disability, but rider must be reviewed for independence trigger language.	Fully independent: no prior total disability required (Standard) MassMutual’s EPR rider allows residual disability claims to trigger directly after the elimination period without a prior total disability period. Both total and partial disability days satisfy the elimination period.	Fully independent: no prior total disability required (Standard) Principal’s residual/partial disability rider triggers after the elimination period regardless of whether any total disability period occurred. The elimination period can be met by residual disability days alone.	Fully independent: no prior total disability required (Standard) Standard’s Enhanced Residual Disability Benefit Rider triggers after the Benefit Waiting Period is satisfied, independent of any total disability. Days of Disability during the Benefit Waiting Period need not be consecutive.
4 · Benefit Period for Residual Disability
Residual benefit period Maximum duration for which residual benefits can be paid	Remaining unused portion of the Total Disability Maximum Benefit Period (Specimen) The Residual Maximum Benefit Period equals the total unused portion of the maximum benefit period for total disability shown on the schedule. Combined total and residual payments cannot exceed this period. Typically to Age 65/67 when selected.	Same Benefit Period as Total Disability: to Age 65, 67, or 70 (Specimen) Benefit Periods of To Age 70/67/65 or 10/5/2 Years are available. The Enhanced Partial rider benefit period matches the policy benefit period.	Per Schedule of Benefits / rider terms (Specimen) The residual rider benefit period is set at time of issue and shown on the Schedule of Benefits (Section 1-D). Confirm with current rider.	To Age 65 (base); Extended to Age 65 via Maximum Benefit Period Endorsement (Specimen) Specimen shows coverage end date for Extended Partial Disability corresponding to the policy’s non-cancellable period to age 65. A separate Maximum Benefit Period Endorsement is available with its own premium schedule.	Same as base policy Maximum Benefit Period: 2 years, 5 years, To Age 65/67/70 (Specimen) Options include To Age 65, 67, and 70. Residual benefits run within this same period. To Age 70 available depending on occupation class.	Same as base policy Maximum Benefit Period: to Age 67 in this specimen (Specimen) Maximum Benefit Period schedule applies (e.g., if disability begins at 62: 60 months; at 63: 48 months). Enhanced Residual Disability Benefit Rider matches base benefit period.
5 · Recovery Benefit Provisions
Recovery benefit Protections after returning to work: continued payments if income remains depressed	Explicit Recovery Benefit provision (Specimen) Triggers after a disability benefit period ends if the insured has returned to work, is performing material duties 80% or more of prior time, and still has 15% or more loss of monthly earnings demonstrably caused by the prior disability. Duration: Continues up to the residual maximum benefit period.	Recovery Benefit: income-loss based, ongoing (Specimen) Benefits continue post-recovery as long as Loss of Income persists due to the disability. Because Guardian uses an income-loss formula, benefits naturally continue as long as Current Income remains below Prior Income due to the disabling condition. Prior Income protection: Uses the best 24-month or best-2-of-3-years average.	Recovery benefit per rider: verify current rider (Specimen) Lloyd’s base specimen does not contain recovery benefit language. Standard Lloyd’s/PIU residual riders may include recovery provisions, but this must be confirmed against the current executed rider.	Recovery Benefit included in EPR rider (Standard) After returning to full-time work following a disability for which EPR benefits were paid, if Monthly Earnings remain below Predisability Earnings due to the disability, a proportional recovery benefit continues. Duration: up to the remaining Maximum Benefit Period.	Recovery Benefit: proportional, ongoing post-return (Standard) Provides recovery benefits when an insured has returned to Full Time Work but Earnings remain below prior levels due to the disability. Benefit calculated using the same proportional formula.	Recovery Benefit included: Enhanced Residual Rider only (Specimen) The Basic Residual Rider does not include the Recovery Benefit: the Enhanced version is required. The base policy confirms premiums are waived while Recovery Benefits are payable. Short-Term Residual Rider: does not include recovery benefit.

Source: specimen policy contracts and riders held by Set for Life Insurance: Ameritas Life Insurance Corp. (form 4501NC, Enhanced Residual Rider, AERES), Berkshire Life Insurance Company of America underwriting for Guardian (form ICC16 18ID, Provider Choice, Enhanced Partial Disability Benefit Rider), Lloyd’s of London through Petersen International Underwriters (form PDI111521), Massachusetts Mutual Life Insurance Company (form ICC15-XLIS-RC, Extended Partial Disability Rider), Principal Life Insurance Company (form ICC22-800-IDI, Income Protector) and Standard Insurance Company (form B180(7/17), Platinum Advantage with residual riders). Rider availability and terms vary by state and are subject to underwriter review at the time of application.

Disability insurance for software engineers draws on carrier specimen contracts, riders, field underwriting guides, a carrier underwriting document on restricted stock units, federal statute, and the Set for Life Insurance Wall Street Income Protection Report.

1. Ameritas Life Insurance Corp., Guardian underwritten by Berkshire Life Insurance Company of America, MassMutual, Principal Life Insurance Company, and Standard Insurance Company each supply the specimen policy contracts, riders and field underwriting guides this page cites by form number or guide section.
2. Massachusetts Mutual Life Insurance Company supplies the underwriting document on restricted stock units (form DI1604) cited for how MassMutual counts RSU income.
3. Lloyd’s of London, placed through Petersen International Underwriters, a licensed managing general agent, underwrites the excess disability coverage referenced above what the five standard-issue carriers write.
4. The Social Security Administration’s Office of the Chief Actuary supplies the disability probability figure (Actuarial Note 2025.6, Table A).
5. The Set for Life Insurance Wall Street Income Protection Report supplies the group long-term disability findings cited for benefit caps, own-occupation duration and taxability.
6. Internal Revenue Code Section 104(a)(3) governs the taxability of a group long-term disability benefit paid on an employer-paid premium.
7. The Employee Retirement Income Security Act of 1974 governs employer-sponsored group long-term disability plans and explains why individual coverage stays in force after a job change.

The information on this page is for general informational purposes only and does not constitute legal, financial, or tax advice. Coverage availability, underwriting terms, and eligibility requirements vary by occupation, income structure, health history, and state of residence. Policy terms described on this page are drawn from specimen policy language and carrier underwriting guides and are subject to change. A carrier can change or withdraw an underwriting program at any time. Actual policy terms govern in all cases.

Excess disability coverage above standard carrier issue limits is underwritten by certain underwriters at Lloyd’s of London and accessed through Petersen International Underwriters, a licensed managing general agent. Compensation figures and occupation-class examples referenced on this page are illustrative only. Set for Life Insurance is a licensed insurance producer.