Disability Insurance Market Report 2026

The disability insurance market size has grown rapidly in recent years. It will grow from $4.56 billion in 2025 to $5.08 billion in 2026 at a compound annual growth rate (CAGR) of 11.5%. The growth in the historic period can be attributed to rising awareness of income protection products, increasing employer-sponsored insurance coverage, expansion of formal employment sectors, growing healthcare cost concerns, increased insurance penetration rates.

The disability insurance market size is expected to see rapid growth in the next few years. It will grow to $7.94 billion in 2030 at a compound annual growth rate (CAGR) of 11.8%. The growth in the forecast period can be attributed to increasing use of ai-driven underwriting, rising demand for flexible coverage options, expansion of digital claims ecosystems, growing focus on preventive health analytics, increasing regulatory digitization initiatives. Major trends in the forecast period include increasing adoption of digital policy management platforms, rising use of data analytics in risk assessment, growing integration of telemedicine and health data, expansion of personalized insurance products, enhanced focus on claims automation.

The rising prevalence of chronic diseases is expected to drive the growth of the disability insurance market in the coming years. Chronic disease refers to an illness that persists for three months or longer and may worsen over time. As chronic conditions increase the likelihood of long-term health complications and disabilities, the demand for disability insurance coverage is growing. Advances in medical care that extend lifespan also contribute to a higher occurrence of chronic diseases and disabilities, further highlighting the importance of financial protection. The effects on workforce productivity, ongoing healthcare costs, and an evolving health landscape reinforce the significance of disability insurance. For example, in April 2025, a report published by the Centers for Disease Control and Prevention (CDC), a U.S.-based public health research organization, noted that in 2023, 76.4% of U.S. adults, or 194 million people, reported having at least one chronic condition. This prevalence differed across age groups, affecting 59.5% of young adults, 78.4% of midlife adults, and 93% of older adults. Consequently, the growing prevalence of chronic diseases is fueling the expansion of the disability insurance market.

Major companies operating in the disability insurance market are implementing AI-based intelligent process automation to strengthen their competitive position. Intelligent Process Automation (IPA) involves utilizing advanced technologies, including artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA), to streamline and enhance complex business operations. For example, in June 2023, ExpertAi SpA, an Italy-based software company, introduced the expert.ai Platform for Insurance, an AI-driven solution aimed at improving insurers' efficiency in language-focused workflows. Using natural language processing (NLP), the platform automates tasks such as document review, data extraction, and evaluations in underwriting and claims processes. It includes ready-to-use data extraction, urgency and severity routing, exposure factor extraction, summarization for human review, GDPR and PII data redaction, and customizable insurance-trained language models. The platform accommodates various insurance applications, delivering advantages like increased review capacity, faster policy issuance, time savings, and enhanced accuracy for risk engineers, underwriters, and claims handlers.

In April 2024, Aviva plc, a UK-based insurance company, acquired AIG Life UK (AIG’s UK protection business) for around $560 million. Through this acquisition, Aviva aimed to reinforce its leadership in the UK protection market by increasing scale, broadening its product portfolio, and expanding its individual and group protection customer base. AIG Life UK is a UK-based insurance firm that specializes in offering individual and group life insurance, critical illness coverage, and income protection solutions to both retail and corporate clients across the United Kingdom.

Major companies operating in the disability insurance market are Unum Group, The Guardian Life Insurance Company of America, Principal Financial Group Inc., The Hartford Financial Services Group Inc., MetLife Inc., Massachusetts Mutual Life Insurance Company, Mutual of Omaha Insurance Company, Illinois Mutual Life Insurance Company, Assurity Life Insurance Company, Aflac Incorporated, Reliance Standard Life Insurance Company, StanCorp Financial Group Inc., Prudential Financial Inc., Allianz SE, Zurich Insurance Group, Aviva plc, Assicurazioni Generali S.p.A, Aegon N.V., Petersen International Underwriters, State Farm Mutual Automobile Insurance Company.

North America was the largest region in the global disability insurance market in 2025. The regions covered in the disability insurance market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the disability insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The disability insurance market includes revenues earned by entities by providing mortgage disability insurance, supplemental disability insurance and Social Security Disability Insurance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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