Best Long-Term Disability Insurance Companies

How to choose the right long-term disability insurance for you

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If you have an accident or suffer an illness that keeps you out of work for three months or longer, long-term disability insurance (LTDI) provides you with a monthly check to cover your living expenses and protects against financial hardship. Only about half of Americans having enough savings to last for three months if they couldn’t work.

A common misconception about this form of income protection is that it only covers catastrophic accidents. However, most people's long-term disability insurance claims are for common health issues like musculoskeletal disorders and cancer. Even a bad ankle sprain could prevent you from working.

In the event of a claim, long-term disability insurance typically pays a percentage of your working income, around 65%, for a set amount of time or until a specified age.

If you're exploring factors like price, availability, coverage limits, and the length of time required before benefits are available, continue reading to find out who made the list of our best long-term disability insurance coverage.

Best Long-Term Disability Insurance Companies of 2021

Best Long-Term Disability Insurance Companies
Best Long-Term Disability Insurance Companies

Best Overall : Guardian


Guardian

Guardian 

Why We Chose It: Guardian is our winner for best overall long-term disability insurance. They use the true “own occupation” definition of disability, plus have excellent customer service and financial ratings.

What We Like
  • Superb reputation

  • Good financial stability

  • Online quotation system

  • History of outstanding customer service

  • Option to buy supplemental riders to fully customizable policies

What We Don't Like
  • Elimination periods can be a lengthy 720 days

  • Medical exams are usually necessary

  • Must use an agent to purchase

We chose Guardian Life as overall top pick status as they are a well-established provider with countrywide coverage. You can be assured of their financial stability with their A++ rating from AM Best and  AA+ rating from Standard & Poor’s. They are underwritten through the Berkshire Life Insurance Company of America.

Guardian offers short-term disability insurance and customizable long-term disability insurance policies, such as the Provider Choice plan. This flexible plan has various built-in features, like hospice care benefit, occupational rehabilitation, and non-cancelable and guaranteed renewal. With other optional riders like catastrophic disability, cost of living adjustment, student loan, and retirement protection options, you can tailor a comprehensive plan to suit you.

You can choose benefit periods of two, five, or 10 years, or until the age of 65 or 70. Plans are guaranteed renewable until age 65 or 70 under certain policies and conditions. You must contact an agent to purchase.

Guardian uses the "own-occupation" definition of disability, meaning you can collect benefits if you can’t do any or all of your current job. This is in contrast to the "any-occupation" definition, meaning you are unable to work in any job, which is considerably more difficult to qualify under.

Exact quotes are not available on the website.

What sets Guardian above the competition is their range of included and optional riders that allow you to customize your long-term disability insurance.

Best for Self-Employed : Northwestern Mutual


Northwestern Mutual

Northwestern Mutual

Why We Chose It: Northwestern Mutual earns our best for self-employed ranking because they offer coverage to gig workers and high earners, with customizable policies. They also have an excellent reputation, financial strength, and customer service track-record.

What We Like
  • Will cover stay-at-home parents and high earners

  • Customizable plans

  • Outstanding customer service

What We Don't Like
  • No online quotation system

  • Need an insurance agent to purchase

  • At over $120, premiums are higher than other providers

A range of customization options makes Northwestern particularly useful for self-employed people. They have policies for part-time workers, home workers, and self-employed specialists in medical fields, which can be difficult to find with other carriers.

Northwestern Mutual is a popular and long-standing provider with an A++ rating from AM Best, and an A+ rating from the Better Business Bureau (BBB), which, combined with flexibility, is why they’re our number-one self-employed long-term disability insurance.  

Although Northwestern’s website offers details of their short and long-term disability and long-term care insurance, you’ll need to contact a local agent when you’re ready to buy a policy. You can find coverage across the United States. 

Northwestern has four definitions of total disability and also offers partial disability coverage for those who can only work part-time. Their policies typically cover illnesses and injuries that prevent you from working for 24 months. This could include cancer and chronic illnesses and injuries requiring multiple surgeries or a long recovery time.

Quotes were not available on the website.

Benefits kick-in after 180 days and pay until age 67. They are generally 65% of your salary, maxing out at $12,000 per month. Renewability depends on the policy and option chosen.

Best For High-Risk Occupations : Assurity


Assurity

Assurity 

Why We Chose It: Assurity is our best for high-risk occupations pick as they offer accessible rates for those in hazardous jobs like laborers, mechanics, and bus drivers.

What We Like
  • Online quotes available

  • Cover for nearly any occupation and budget

  • Built-in benefits like home modification and rehabilitation

What We Don't Like
  • Need an insurance agent to buy policies

  • Non-cancelable rider only available for initial five years

Assurity policies embrace people working in a broad range of jobs, from office work to laborers, no matter if they are risky occupations. This factor, along with affordable policy prices, made Assurity our top pick for high-risk occupations insurance.

When considering Assurity’s financial strength, note their rating of A- from AM Best: As the fourth-highest rating, this means they are not as stable as some of their competitors.

You can find quotes online with Assurity, but you’ll need an insurance agent if you want to then buy a policy. Policies are guaranteed renewable until age 67, with elimination periods of 30, 60, 90, 180, or 365 days.

Assurity offers a range of additional riders that provide flexibility. Riders include catastrophic disability, critical illness, and retroactive injury. There’s also a non-cancelable rider, which protects you from reduced benefits, canceled policies, or increased premiums. However, it’s only available during the initial first five years.

Assurity also caters to people with high salaries, as they max out at $20,000 in total benefits. However, they won’t cover some occupations like armed forces, athletes, and students. Curiously, they won’t cover self-employed artists either.

People countrywide, except for the state of New York, can opt for an Assurity long-term disability insurance with a range of policy riders.

Best for Ease of Qualifications : Principal Financial Group


Principal Financial Group

Principal Financial Group

Why We Chose It: We chose Principal Financial Group as our ease of qualifications pick because they offer various disability insurance policies, including the Simplified DI program. People can qualify for up to $6,000 a month in long-term benefits quickly and easily with no medical exam.

What We Like
  • Streamlined enrollment process

  • Generous benefits of $6,000 per month with simple underwriting

  • Available to workers of 20+ hours per week

What We Don't Like
  • No online applications

  • Must use a local insurance agent

  • Can take a few days to process application

Principal only requires employment of 20 hours a week to qualify for a policy. With their Simplified DI policy, there’s no medical exam. Instead, you’ll need to answer questions during a phone interview and they will approve or refuse coverage within a few days. 

Principal provides disability insurance policies across the United States with up to $20,000 in monthly benefits. However, if you use the simplified underwriting option this maxes out at $6,000. 

With Principal, you can select the level of protection that you prefer. Basic policies offering $700 to $800 in monthly benefits, cost an average of $35 to $60 per month. If you choose more comprehensive coverage, this can cost upwards of $220, but you’ll receive payments of $2,500 each month, should you claim.

Policy details vary considerably with elimination periods from 30 to 365 days, and benefit periods of two or five years, or until ages 65, 67, or 70. Renewability also varies by policy.

Principal Financial Group began in 1879, making them one of the oldest and most successful providers in the United States. Their financial strength is rated A+ by AM Best and they have an A+ rating from the Better Business Bureau (BBB).

Best Budget : Breeze


Breeze

Breeze 

Why We Chose It: Our top budget pick is Breeze, offering low monthly premiums with adequate coverage.

What We Like
  • Speedy, 100% online process

  • Most people do not need a medical examination

  • Noncancelable and guaranteed renewability to age 65 or 67

What We Don't Like
  • No short-term policies available

  • No access to insurance agents

  • Unavailable to people in the state of New York

Breeze makes the online process easy, with a website prompt to check your price. We found the lowest prices were around $30, offering benefits of $700 with a five-year benefit period and 90-day waiting period. 

If you’re under 50 with a policy worth less than $4,000 monthly, you don’t need a medical exam. Coverage maxes out at $20,000 per month. Elimination or waiting periods vary, and policies are renewable until age 65 or 67, providing you buy the policy before 62. 

People across the United States can buy a Breeze long-term disability policy, except for in New York state. You can also purchase supplemental options for critical illnesses, catastrophic disability, your own occupation, and others.

A Breeze policy won’t cover you for pre-existing conditions or some occupations, like authors, athletes, the armed forces, and students.

Breeze uses the Assurity Life Insurance Company to underwrite their policies. Assurity has an A- rating with AM Best and a Better Business Bureau A+ rating.

Final Verdict

Long-term disability insurance is a financial safety-net protecting you against loss of income should you become sick or injured and unable to work. Overall, Guardian took our top-spot because of their solid reputation and range of customizable options, which make their policies flexible enough to cover most circumstances. 

When you’re self-employed, it can be challenging to find insurance cover, including for long-term disability. Our top pick for self-employed individuals is Northwestern Mutual for their excellent industry rankings and range of options. If you work in a high-risk occupation, Assurity offers coverage. 

If your budget doesn’t stretch to Guardian’s coverage, consider Breeze. At $44, their coverage was still the cheapest policy we found. 

Finally, the Principal Financial Group dominated the category for ease of qualifications because of its streamlined process with no medical exams.

Compare Providers

Insurance provider Why we picked it Maximum coverage
Guardian Best Overall $20,000
Northwestern Mutual Best for Self-Employed $12,000
Assurity Best For High-Risk Occupations $20,000
Principal Financial Group Best for Ease of Qualifications $20,000
Breeze Best Budget $20,000

FAQs

What Is Long-Term Disability Insurance?

Long-term disability insurance (LTDI) is a form of income protection that allows you to maintain your standard of living by covering expenses if you cannot earn a wage due to an illness or injury. 

This form of policy doesn’t only insure against accidents that leave someone permanently disabled and unable to walk; it also covers common health concerns such as heart attacks, cancer, and musculoskeletal disorders.

Benefits of long term disability plans usually have an elimination period of 90 or 180 days. This is how long you must wait after you become disabled before you receive any payments from your policy.

Some people with disabling conditions may find help from the government through free Social Security Disability Insurance (SSDI). This would be the last resort for most people as it is notoriously difficult to qualify for.

What Issues Qualify For Long-Term Disability Insurance Coverage?

Insurance companies offering long-term disability insurance use specific criteria to qualify someone as disabled. Although the definition of disability varies by carrier, it typically means that you must be unable to do the work that you did before the disabling event, and you cannot adjust to other work.

"Fully disabled" generally means you're totally unable to perform duties at work, whereas "partially disabled" means you can no longer work full-time in your original job, but could work in another. 

You’ll need medical evidence that proves you meet the insurance policy's definition of disability. This includes your medical records, clinic notes, laboratory results, scans, x-rays, and surgical reports. Keep in mind that there are also requirements of minimum working hours and elimination or waiting periods. 

Should You Get Long-Term Disability Insurance?

Your decision about buying long-term disability insurance depends on a number of factors. If you have substantial savings that could cover your living expenses for months or even years, you may not need a policy. If there are two or more wage earners in the household, you may not feel an LTDI warrants the monthly premium.

If, however, like most Americans, you wouldn’t be able to pay for bills and other costs if you couldn’t work, it’s worth considering an LTDI policy. This is especially prudent if you’re the sole earner. 

Your occupation also affects how advisable it is to buy an LTDI policy. If you’re in a high-risk occupation where workers frequently suffer injuries, a disability is more likely than for someone who works in an office at a desk. Even minor injuries could make certain duties impossible to perform, yet would make hardly any difference to others. A broken hand for a laborer is more significant than to a teacher.

How Much Does Long-Term Disability Insurance Cost?

To reap the benefits of long-term disability insurance, you must pay a monthly premium. We found that average premiums represented between 0.5% and 2% of gross annual income. 

Various factors affect the cost of long-term disability insurance. These include the plan’s coverage, monthly benefit amount, occupation, and if you have pre-existing health issues. 

In contrast to life insurance, men usually pay less for disability insurance as women file claims for pregnancy. Younger people typically pay less as health tends to decline as you age, meaning that illnesses and injuries are more common. Behaviors such as smoking and drinking can also affect cost. 

How Long Does Long-Term Disability Insurance Last? 

Long-term disability insurance policies usually pay benefits for two, five, or ten years, or until you retire. Most insurance carriers require a regular reassessment of your disability to ensure you qualify for continuing payments and cannot return to work.

How We Chose the Best Disability Insurance Companies

We evaluated 15 insurance companies offering long-term disability insurance before selecting the top picks for the five categories. A range of elements was reviewed including ease of quotation and purchase, monthly premium costs, length of elimination periods, and optional riders.

It’s essential that companies also value client satisfaction and are financially stable so they can payout on claims. With this in mind, we also reviewed data from the NAIC, BBB, and AM Best before deciding on category winners.

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Article Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
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