The 5 Best Long-Term Disability Insurance of 2020

Income protection for extended illness or injury

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According to the Social Security Administration, more than one in four Americans will become disabled before ever reaching retirement age. Whether that disability is temporary or permanent, it’s imperative to have an income replacement plan in place as early as possible, which should ideally include disability income insurance.

Disability coverage provides you with the support you need if you were to become hurt or sick and could not work. Long-term disability insurance can offer years of replacement income, lasting well into your 60s in many cases, while short-term disability helps during a temporary injury or illness, or when you give birth.

While both policies are worth considering, long-term coverage is arguably the most valuable, especially if your ability to work becomes permanently affected. We compared more than 25 different insurers to determine the best long-term disability insurance for you. Here are our top picks and why they were selected.

The 5 Best Long-Term Disability Insurance of 2020

Best Overall: Breeze

Breeze

 Breeze

Claiming our best overall spot, Breeze makes getting coverage simple by taking as little as 15 minutes to apply for and purchase a disability policy online. There is no medical exam required for most applicants, and coverage starts as low as $9 a month.

Pros
  • Automated underwriting makes it quick and easy to buy coverage if you qualify

  • The 100% online process means most people won’t need to speak with an agent

  • No medical exams required for most applicants

  • Noncancelable and guaranteed renewal coverage through age 65 or 67

Cons
  • No short-term coverage offered

  • Not available in New York

  • Active-duty military are excluded from coverage

  • Consumer reviews and the company’s history are sparse

  • There are coverage limitations regarding foreign travel and mental health

Though Breeze is a fairly new digital insurance company, only founded in 2019, its simple buying process makes it our top choice for individual long-term disability coverage.

Policies are underwritten by Assurity, an insurer rated A- by AM Best that has been providing coverage since 1890. Breeze uses automated underwriting technology and algorithms to change the way we buy disability insurance, offering quick online quotes and coverage to customers all across the country (excluding New York). 

It’s a “breeze” to apply for a long-term disability policy through this top pick, taking 10 minutes or less through a 100% online process. If eligible, you can even purchase this coverage with just a few clicks, and a medical exam is not required for many customers. For instance, if you’re between the ages of 18 and 50, a medical exam probably won’t be necessary as long as you’re buying $4,000 or less in monthly coverage.

Elimination (or waiting) periods on Breeze policies range from 30 to 365 days. Benefits can run one, two, five, or 10 years in length, or they can last until you reach retirement age (65 or 67, depending on your policy). Typically, your benefit options will max out at around 60% of your income.

Available options on Breeze long-term disability policies include automatic benefit increase, guaranteed insurability, own occupation, supplemental DI, and residual disability benefit riders. While Breeze offers coverage to a variety of occupations and industries, laborers may find that their policy options are a bit more limited.

Through Breeze, a 35-year-old nurse practitioner in Virginia would be able to get 10 years of $4,000/month disability coverage, with a 60-day waiting period, for about $150 a month.

Best for Customization: Guardian

Guardian

 Guardian

With four policy types offered and a slew of riders and coverage options, Guardian is our preferred choice for customization of your disability insurance. Options include short- and long-term policies, group policies, and even supplemental insurance coverage. To help you further customize your policy, you can choose between riders like a future benefits increase, guaranteed renewability, and student loan protection, allowing you to completely customize a policy according to your needs.

Pros
  • Variety of riders and policy options to choose from

  • Long-term, short-term, group, and supplemental coverage available

  • Quotes are available online for some applicants

  • Discounts available for preferred occupations

Cons
  • Many applicants will need to speak with a representative to get a quote and/or purchase coverage

  • Elimination periods can last up to 720 days

  • Policies are not geared toward blue collar workers

  • Medical exam likely required (unless you’re buying supplemental coverage)

Founded in 1860 and backed by Berkshire Life Insurance Company of America, Guardian offers a number of disability insurance options including long-term coverage. The company holds an A++ rating from AM Best. 

Guardian offers individual long- and short-term disability policies, as well as group coverage and supplemental policies. Long-term policies can replace up to 60% of your income, with benefits lasting five years, 10 years, 20 years, or until you reach retirement. Some policies will allow you to renew your coverage beyond age 65 (or 67), called a conditional renewal, if you are still employed and not disabled.

Long-term disability coverage through Guardian is completely customizable, making it our top pick for this category. You can choose between riders such as noncancelable, guaranteed-renewable, residual benefits, student loan debt payment protection, and future benefits increase. Elimination periods can be between 30 and 720 days long. 

Depending on your age, location, and occupation, you may be able to get a quote online; others will need to contact a Guardian representative to get a price for coverage. If and when you’re ready to move forward with purchasing a policy, you’ll need to connect with an agent directly.

Guardian offers long-term disability policies for a variety of professions, but they admittedly prefer certain occupations, many of which are in the medical or dental fields. In fact, Guardian even offers a 10% discount if you hold one of those “preferred occupations.”

Our 35-year-old nurse practitioner would be able to get $4,000 in monthly coverage for 10 years through Guardian, with a 90-day waiting period, for $168 a month.

Best for Risky Occupations: Assurity

Assurity

 Assurity

Whether you are a mechanic, welder, state patrol officer, or hold any number of other high-risk occupations, Assurity is likely to have disability coverage for you, making them our top pick for risky occupations. Policies come with multiple built-in benefits as well as additional riders to choose from.

Pros
  • Coverage is available to many high-risk professions

  • Conditionally renewable to age 75

  • Built-in benefits include waiver of premium, presumptive disability benefit, and more

  • Benefit periods range from one year to retirement age

  • Elimination period from 30 to 365 days

Cons
  • Many riders not available in New York

  • Cannot buy coverage online

  • Online quotes don’t allow for much personalization

Assurity holds an A- rating from AM Best and has roots dating back to 1890. They offer both short- and long-term disability insurance, with policies providing full and partial coverage depending on whether you’re able to work at all.

If you work in a higher-risk profession—such as an electrician, welder, state patrol officer, mechanic, etc.—you may find that buying disability income insurance coverage is tricky, and often expensive. In fact, many companies will refuse to insure these occupations altogether.

Assurity is one company that seems to welcome high-risk professions, however, with their Century+ Individual Disability policy, making it our preferred provider for those risky occupations. Benefit periods can be chosen from one, two, five, or 10 years, or through retirement age (65 or 67, depending on underwriting class and your age), and elimination periods are 30 to 365 days.

Getting a quote online isn’t as intuitive as with other insurers, though. You’re unable to really personalize your benefits or waiting period, and are forced to choose between the handful of options that Assurity’s quote tool automatically generates. Since you will need to contact an agent to finalize your coverage and purchase a policy anyway, though, this may not matter.

Best for No Medical Exam: Principal Financial Group

Principal Financial Group

 Principal Financial Group

Principal Financial Group offers a few different disability insurance products, including the Simplified DI program. This allows consumers to get up to $6,000 a month in long-term coverage faster and with fewer requirements, like no medical exam, earning them our top spot in the no medical exam category.

Pros
  • Streamlined process is quick and easy

  • No medical tests or financial documents are required

  • Benefits of up to $6,000 per month are available with simplified underwriting

  • Coverage can be updated to keep pace with your salary

  • Employment requirement is only 20 hours per week

Cons
  • Only offered to applicants under age 50

  • Online quotes and applications are not available

  • Final answer can take a few days to receive

With a history dating back to 1879, Principal Financial Group has a long and successful track record of offering quality insurance coverage. They hold an A+ financial strength rating from AM Best and offer a variety of disability insurance products to suit consumers’ needs.

Principal offers individual disability income insurance policies with up to $20,000 in monthly benefits, though this maxes out at $6,000 if you want simplified underwriting and no medical exam. Elimination periods range from 30 to 365 days, with benefits lasting two or five years, or through retirement (ages 65, 67, or 70, depending on your policy).

The quote and application processes are not offered online with Principal’s Simplified DI policy. Instead, you’ll need to answer a few questions with your advisor, then complete a 15-minute phone interview with one of Principal’s trained professionals. You’ll find out if you’re approved for coverage within a few days; this easy, exam-free policy option is why Principal earns our top spot for providing long-term disability insurance with no medical exam.

Unlike many other companies that require 30 hours of weekly work to be considered, Principal only requires you to work a minimum of 20 hours a week in order to qualify for a policy.

There are many different discounts available through Principal, including a 10% affiliation discount and discounts for certain associations or organizations. Policy options include waiver of premium, future benefits increase, benefits update, and transitional occupation rider, all so you can create the policy that suits you best.

Best for Rider Options: Mutual of Omaha

Mutual of Omaha

 Mutual of Omaha

If you’re looking for long-term disability insurance that lets you really customize your policy and keep coverage for as long as possible, Mutual of Omaha may have what you need. They are our top choice for best policy rider options, allowing you to choose between features like future insurability, critical illness coverage, and return of premium, to name a few.

Pros
  • Up to $12,000 per month in benefits

  • Premiums stay level through age 67

  • Many built-in policy benefits

  • Multiple additional riders to choose from

Cons
  • Shortest elimination period is 60 days

  • Coverage can be continued through age 75, but premiums will increase

  • Quotes not available online

  • Policies must be purchased through an agent

Providing insurance coverage since 1909, Mutual of Omaha has become a trusted name throughout the United States. They hold an A+ financial strength rating from AM Best and are a Fortune 500 company with nearly 12 million members.

Mutual of Omaha currently offers two categories of disability insurance coverage: Priority Income Protection and the more comprehensive Disability Income Choice Portfolio. Mutual of Omaha’s long-term disability insurance product falls into the Disability Income Choice Portfolio category, offering full-scale and personalized income protection for individuals with any budget or preference. 

With this long-term policy, you’ll enjoy built-in benefits such as total and proportionate disability, guaranteed renewal, waiver of premium, terminal illness and rehabilitation benefits, and a survivor benefit. If you want or need more, you can also add a critical illness rider, future insurability option, accidental medical expense benefits rider, or return of premium benefits rider, thus earning Mutual of Omaha our nod as best for rider options.

Waiting periods for the long-term disability policy are between 60 and 365 days, with benefits paying out for two, five, or 10 years, or through retirement age (67). You can also continue coverage through age 75, however, premiums increase after age 67.

In order to get a quote or purchase a policy, you’ll need to go through a Mutual of Omaha agent directly.

What Is Long-Term Disability Insurance?

Long-term disability insurance is coverage intended to protect your income if you are unable to work due to illness or injury. While short-term disability insurance usually lasts a maximum of two years, long-term coverage can often last five or 10 years, if not all the way through to your retirement. 

The average individual disability claim lasts over 34 months, or nearly three years. If you are unable to work (or make your usual income) during that time, you could find yourself in financial hot water. With the right long-term disability insurance, though, your income would be supported for years at a time. You would be able to better manage your usual expenses, even if out of work for an extended time period. 

Should You Get Long-Term Disability Insurance?

No one expects to find themselves disabled. Unfortunately, it happens often and can impact you for weeks, months, or even years at a time. Having disability insurance coverage to call upon could make or break your household budget.

More than half of American households admit to living paycheck-to-paycheck. If that income were to suddenly disappear due to an unexpected disability, would you still be able to manage the expenses out of pocket? Could you do it for six months, or even longer?

If not, you’re definitely not alone. Let’s say your household expenses total $4,000 per month; over the course of six months, that’s $24,000 that you’d need to have in emergency savings just to stay afloat. With long-term disability insurance, though, a percentage of your income would be protected, allowing you to heal, recover, and still pay your bills at the same time.

If you have the emergency savings on-hand to keep your family afloat during an unexpected illness or injury, long-term disability might not be necessary. However, if you worry that you would run out of savings—or are currently unprepared for such a burden—it’s worth considering a policy.

What Is Considered a Long-Term Disability?

A long-term disability is an injury, illness, or medical condition that affects a person for six months or more, preventing them from working their usual job, at their usual pace, or making their usual income.

You might be surprised to learn that approximately 90% of long-term disabilities today are the result of an illness, not an accident or injury. This puts disability in the realm of possibility for any of us, no matter how young, healthy, or seemingly safe. 

Long-term disabilities could include cancer, neurological or joint disorders, and asthma, to name a few. They could also include injuries, like those due to a fall or even a car accident. 

If you have long-term disability coverage, it can protect your income for years, though you will need to wait until the end of your elimination period to begin receiving funds. This is why some people also carry short-term disability insurance; these policies can have waiting periods as short as zero days, helping bridge the gap for you and your bank account.

How Long Does Long-Term Disability Last?

Even after coverage is approved, your long-term disability insurance benefits won’t kick in until you’ve satisfied the waiting period requirement. For most policies, this is at least 30 days, though it can easily be 60, 120, 365, or even 720 days. 

Once benefits start, they will continue until your predetermined benefits limit is reached. This is the period of time you chose when you purchased the policy, and can last for a specific number of years (often one to 10) or through retirement. The longer the benefits period, the more you’ll pay in premiums for your coverage.

What Does Long-Term Disability Insurance Cost?

As with all insurance policies, your cost for long-term disability insurance will depend on your personal factors as well as the policy features you choose. Typically, however, premiums will cost around 1% to 3% of your annual income.

As we saw in the examples above, a 35-year-old nurse practitioner in Virginia could expect to pay around $150 to $170 per month for $4,000 in disability insurance coverage, for a 10-year benefit. However, this could vary greatly based on location, medical exam results, and optional riders.

How We Chose the Best Long-Term Disability Insurance

In creating this list, we looked at and compared more than 25 different disability insurers offering long-term coverage. In order to choose the best for each of these long-term coverage categories, we considered a variety of factors including the ease of obtaining a quote and buying a policy, coverage availability, price, financial strength ratings, and policy options.

We also looked at customization options and features available, which allow customers to really create the policy that best suits their and their family’s needs.

Article Sources

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  2. Council for Disability Awareness. "Disability Statistics." Accessed June 25, 2020.

  3. HowMuch.net. "Disability Insurance Cost." Accessed June 25, 2020.