Best Long-Term Disability Insurance

Take care of yourself and your family if you become ill or disabled

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Long-term disability (LTD) insurance is coverage that replaces your income if you get hurt or become sick and can’t work for an extended period of time. Unlike short-term disability insurance, which can go into effect in as little as two weeks, long term disability insurance is meant for more severe cases of injury or illness, and is designed to kick in once your short-term benefits run out. Most long-term plans have a waiting period of 180 days, but some begin as early as 90 days after you submit a claim.

To choose the best long-term disability insurance companies, we researched nearly two dozen of the top insurers based on financial stability, consumer reviews, and the depth and breadth of their offerings.

The 6 Best Long-Term Disability Insurance of 2022

Best Overall : Northwestern Mutual


Northwestern Mutual

Northwestern Mutual

Pros
  • High customer satisfaction ranking

  • Superior financial strength

  • Specialized policies available

  • Policies eligible for dividends

Cons
  • No online quotes

Why We Chose It

Northwestern Mutual is ranked number-one for long-term disability coverage for its superior financial strength, low incidence of consumer complaints, and high customer satisfaction ranking.

Northwestern Mutual holds an A++ (Superior) financial strength rating from AM Best. AM Best looks at a company's finances to determine whether it's able to honor its ongoing insurance obligations, such as paying claims, and A++ (Superior) is the highest rating it bestows. Plus, the company came in third for customer satisfaction in J.D. Power's 2021 U.S. Individual Life Insurance Study. It's one of the oldest companies in our review and has been around since 1857. It even pays dividends to eligible policyholders.

In addition to its standard disability insurance coverage, Northwestern Mutual offers specialized coverage for doctors, dentists, and even stay-at-home parents. For instance, if a policyholder gets injured or ill and needs to hire help to care for their children, the policy would cover it. These offerings were not found with many carriers, which further sets Northwestern Mutual apart from the pack.

Runner-Up, Best Overall : Guardian Life


Guardian Life

Guardian Life

Pros
  • Superior financial strength rating

  • "Own occupation" coverage

  • Online quotes

Cons
  • Slightly below average ranking for customer satisfaction

Why We Chose It

Guardian Life is a large company that has been around since 1860. It has made a name for itself in both life insurance and disability coverage. Guardian's disability policies are underwritten by Berkshire Life Insurance Company of America, another large insurer that has an A++ (Superior) rating from AM Best. Guardian is still going strong, and making records with $9.5 billion in capital and $1.7 billion in operating income.

One of the great benefits of disability insurance from Guardian is the company’s “own occupation” coverage. That means your policy will replace a portion of your income if you can’t remain employed in your regular job or career, even if you’d be capable of doing other forms of work. Guardian writes policies for terms ranging from two to 20 years and offers disability coverage up to age 65 (or older, depending on your policy).

Three features put Guardian on our list as runner-up for best long-term disability companies: its financial stability, reputation for stellar service, and the ability to get a quick quote online.

Most Affordable : Breeze


Breeze

Breeze

Pros
  • Online quotes

  • Online application

  • No-medical-exam coverage available

Cons
  • Third- and fourth-highest financial strength ratings

Why We Chose It

With plans starting at just $9 per month, Breeze stands out as the most affordable long-term disability insurance company on our list and may have the easiest application process. Underwritten by Assurity Life Insurance Company and Principal Financial Group, Breeze’s online-only quote system is just that—a breeze. You can get a quote and apply for a policy online in as little as 15 minutes.

In fact, if you meet certain criteria, you might not even need a medical exam to have your policy approved. For instance, if you are under 50, you won’t need an exam unless your policy is worth more than $4,000 per month. If you are between 56 and 60, you won't need an exam unless your coverage is higher than $1,500 per month. And as long as you get your policy before age 62, you can renew it up to age 67.

Assurity has an A- (Excellent) financial strength rating with AM Best and Principal has an A (Excellent) rating. Though not as impressive as competitors on this list with an A++ (Superior) rating, both speak to the company's financial strength. Breeze is new to the market, but is making waves with its entirely digital approach to applying for long-term disability insurance.

Best Service : MassMutual


MassMutual

MassMutual

Pros
  • Superior financial strength

  • Very few customer complaints

  • Online quotes

Cons
  • Must apply with an agent

Why We Chose It

Earning the title for best service on both our Best Short-Term Disability Companies list and here, MassMutual has an excellent track record for customer service. It has been in business since 1851, ranked 7th in the JD Power Study, and receives very few customer complaints, according to the National Association of Insurance Commissioners (NAIC).Plus, it has an A++ (Superior) rating from AM Best, like other top insurers on this list.

MassMutual provides a wealth of financial resources and information on its website, including a disability income (DI) insurance calculator to help you decide how much coverage you need.

The company offers benefit periods of two, five, or 10 years, up to the ages of 65 or 67, depending on your policy. Waiting periods start at 60 days, and coverage is fully portable, meaning you can take your policy with you even if you switch employers.

Best for Small Business Owners or Self-Employed : Assurity


Assurity

Assurity

Pros
  • High coverage limits

  • Can bundle coverages

  • Many optional coverages for business owners

Cons
  • Unimpressive financial strength rating

Why We Chose It

Long-term disability coverage is even more important if you’re a business owner. After all, your business might not withstand the loss of you at the helm for several months—or even years. Having a long-term disability policy in place ensures you’ll receive income even in times when your business or freelance work isn’t earning you money.

We chose Assurity as best for small business owners and self-employed individuals due to the high coverage limits and depth of options. Disability insurance from Assurity is also available through Breeze, a top-rated insurtech firm that also makes our list. However, coverage options may be limited via Breeze if you are self-employed. Plus, by going directly through Assurity, you can bundle other business insurance coverage with your long-term disability policy.

Assurity offers benefit periods of one, two, five, or 10 years, and you can renew your policy up until age 67. Coverage amounts range from $500 to $20,000 per month, making it perfect for high-earning business owners and solo-preneurs. Your Assurity policy for business owners, or business overhead expense (BOE) coverage, will even pay for your lease, payroll, and company-related expenses if you are unable to work. These factors put it at the top of our list as the best long-term disability insurance for business owners or self-employed individuals.

Best for Coverage Options : Mutual of Omaha


Mutual_of_Omaha

Mutual_of_Omaha

Pros
  • Return-of-premium rider available

  • Good customer satisfaction rating

  • Partial benefits available

Cons
  • Online quotes aren't specific

Why We Chose It

Mutual of Omaha, founded in 1909, has an A+ (Superior) rating from AM Best and a stellar reputation for customer service—it came in fifth in the J.D. Power study. But it also has many options for long-term disability coverage that we didn't see with most other insurers we reviewed. These factors put it at the top of our list for LTD insurance coverage options.

Monthly benefits can extend to $12,000, depending on your salary, and you can renew your policy up to age 67. Plus, you can get partial benefits if you’re able to work part-time, and you may qualify for additional benefits as well.

Some of the optional benefit riders include a Hospital Confinement Indemnity Benefits Rider, which pays up to $500 per day if you’re hospitalized, and up to $1,000 if you’re in an intensive care unit. The Return of Premium Benefit Rider gives back up to 80% of your premiums, minus claims paid, after 10 years if you don't use the policy. If other companies offer these value-added riders, they aren’t readily advertised.

However, the company's "online quotes" only provide a wide range of what you'll pay for coverage, depending on your occupation. For a specific quote, you'll need to contact an agent.

What Is Long-Term Disability Insurance?

Long-term disability insurance companies can provide you with income to live on should you become seriously ill or injured, usually for a period of six months or more. As with other insurance policies, you pay your insurance premiums each month, and the insurance company pays your benefits when you file a valid claim. An elimination period—usually between 60 and 180 days—will need to be satisfied before coverage takes effect.

What's the Difference Between Short- and Long-Term Disability Insurance?

Long-term disability benefits can last for as long as 10 years. So if you are permanently injured or battling an illness, your long-term disability insurance can supplement your Social Security disability insurance. This pair may allow you to maintain the quality of life you had before your illness or injury.

Short-term disability, on the other hand, is designed to give you enough money to live on until you recover or until long-term DI insurance kicks in. 

What Does Long-Term Disability Insurance Typically Include?

Long-term disability pays a portion of your salary or the full amount of your lost income, depending on your policy. Some policies, like Mutual of Omaha, may also provide:

  • Extra funds for hospitalization
  • Lump-sum payout if you die while disabled
  • Extra funds to cover inflation while you’re disabled
  • Lump-sum payout for a critical illness
  • Medical expense reimbursement for accidents
  • Rehabilitation services

What Does Long-Term Disability Insurance Typically Exclude?

As with short-term disability, long-term disability does not cover disability from injuries sustained on the job. Instead, workers’ compensation should pay these claims. Long-term disability insurance sometimes has more exclusions, or limitations, than short-term disability policies, which may include:

  • Pre-existing conditions
  • Mental limitations (If your disability is caused by a condition classified in the Diagnostic and Statistical Manual of Mental Disorders, benefit payments may be limited to two years. These conditions may include depression, anxiety, stress, and dementia.)
  • Alcohol and substance abuse
  • Acts of war
  • Suicide attempts
  • Pregnancy

There are also time exclusions for long-term disability insurance. Typically, coverage won’t kick in until you’ve been out of work for six months. Benefits may expire after 24 months, but some policies have coverage terms of up to 10 years. 

What Are the Typical Costs of Long-Term Disability Insurance?

Long-term disability insurance costs vary based on the salary you’re looking to replace if you get injured or become ill. Other factors, including your age, gender, and occupation, also affect your rate. If you want to replace your full income, you can expect to pay between 1% and 4% of your annual income. If you make $50,000 a year, you may be able to get a policy for as little as $500 per year, or $41 a month, which is less than $2 a day. 

Is Long-Term Disability Insurance Worth It?

Along with life insurance, long-term disability insurance may offer the best value you can find in an insurance policy. Look for a policy that offers “own occupation” coverage, which means that you can file a claim if you can’t work in your chosen field, even if you’d be capable of doing other forms of work. Filing for long-term disability is often a better option than dipping into your emergency funds or retirement savings. The money you receive from LTD is a tax-free benefit (unless you’re paying premiums through your employer with pre-tax dollars). In other words, you do not have to pay taxes on your DI benefits checks.

Do I Need Disability Insurance If My Employer Provides Workers’ Comp?

Worker's compensation is a state-mandated, employer-funded benefit required for most employers in all states (except for Texas), but it does not replace long-term disability coverage. Workers' compensation only covers work-related injuries or illnesses, which occur at the workplace.

LTD, on the other hand, can cover injuries or illnesses that occur outside of work. Unless the injury clearly happened at work, it can be easier to use your LTD benefits than trying to prove your workers’ comp case in court.

How We Chose the Best Long-Term Disability Insurance Companies

We reviewed about two dozen of the largest and most respected disability insurers plus a few newer insurance companies to find the best options for private, long-term disability coverage. We evaluated their financial strength, policy flexibility, and customer service, as well as pricing estimates, where available, to find the best options for your needs.