Best disability insurance companies of April 2024
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BLUEPRINT
Updated 4:19 a.m. UTC April 1, 2024
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The best disability insurance company in 2024 is Mutual of Omaha, based on our analysis of individual long-term disability insurance policies.
Top-rated disability insurance companies in 2024
- Mutual of Omaha: Best long-term disability insurance.
- Ameritas: Best for discounts.
- Assurity: Best for high-risk occupations.
- MassMutual: Best for disability insurance riders.
- Principal Financial Group: Best for simplified underwriting.
Why trust our disability insurance experts
Our team of disability insurance experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 9 companies analyzed.
- 126 data points compared.
- 5 levels of fact-checking.
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Best disability insurance companies of April 2024
Compare the best disability insurance companies of 2024
Methodology
We analyzed insurers that sell individual long-term disability insurance policies to determine the best disability insurance companies. Each disability insurance company was eligible for up to 100 points, based on long-term disability insurance policy performance in the following key categories:
Maximum monthly benefit options (25 points). Long-term disability policies with a maximum monthly benefit of $30,000 per month received full points.
Short elimination period options (25 points). Long-term disability policies with elimination periods as short as 30 days available received the maximum amount of points.
Length of benefit period options – up to age 70 (25 points). Long-term disability policies with benefit periods of up to 70 years old received the maximum amount of points.
Length of benefit period options – 10 years (10 points). Long-term disability policies with length of benefits periods of 10 years available received full points.
Online quotes available (10 points). Disability insurance companies that allow you to get a quote online without needing to speak to a financial representative received full points.
Short-term disability available (5 points). Disability insurance companies that also sell short-term disability insurance received full points.
How much does disability insurance cost?
Disability insurance typically costs between 1% and 3% of your annual income. So if you earn $50,000 per year, your annual premium may be between $500 and $1,500, or $60 to $125 per month.
There are several factors that determine your overall cost of disability insurance.
Monthly benefit amount
The monthly benefit amount is how much the disability insurance policy will pay you each month while you are unable to work. Although individual policies can vary, most will pay between 50% and 70% of your annual income, says Neal Patel, Disability Income Specialist at Guardian Life Insurance.
Benefit period
The benefit period is the maximum amount of months or years the disability insurance policy will pay for a covered disability.
For example, if you have short-term disability coverage, your plan generally pays for up to three or six months. But with a long-term policy, it could pay benefits for anywhere from one to 10 years or up to age 65 or 70, as long as you have a qualifying disability.
The longer the benefit period, the more you’ll pay for disability insurance.
Elimination period
The elimination period, or waiting period, is the time between your disability occurring and when the policy will begin to pay benefits. This time period is usually between 30 and 365 days, but some long-term disability plans, like MassMutual’s Radius Choice, offer a 730-day, or two-year, option.
The longer the waiting period, the lower your premium. But keep in mind, that’s how long you may go without a paycheck. It might be worth having a shorter elimination period and higher premium to ensure financial stability while you’re out of work recovering.
Gender, age and health
Although women typically pay more for disability insurance than men when they’re younger due to the potential for pregnancy complications and extended disability claim periods, men pay more as they age.
If you smoke, are in poor health or have a personal or family history of chronic illnesses, you’ll pay more for disability insurance. Some long-term disability insurance companies will allow you to exclude a disability or disease you currently have to get a lower premium. But if you can’t work because of that illness or disability, you won’t be able to collect disability payments.
Profession
Your occupation and annual salary factor into your disability insurance premiums. High-income earners and those in high-risk professions are more likely to file a disability insurance claim, so these individuals pay more for coverage. Although you might pay more for disability insurance, your higher risk of filing a claim and being out of work for an extended period of time without a paycheck can make the higher cost worth it.
Our experience:
“A few years ago, my husband was involved in a car accident where he sustained severe injuries. He’s a mechanic and was unable to work for three months. Luckily, he had a group disability insurance plan through his work, and we were able to file a disability claim.
Although his premiums were expensive — around $75 per week — it was well worth the cost. His disability checks were enough to keep all our bills current and allow me to take some time off work to care for him. He could focus on recovering, and neither of us was stressed about him getting back to work until he was ready because we had the disability insurance policy in place when he got hurt.” – Heidi Gollub, USA TODAY Blueprint managing editor of insurance.
Best disability insurance by profession
One of the most important factors determining your disability insurance premium is your occupation. Your profession can also determine which riders and coverage options you choose. Here are some to consider.
- True own-occupation disability insurance. This coverage will allow you to work in a different occupation while still collecting your full disability benefit amount after being unable to perform your occupational work duties.
- Student loan protection. Doctors, dentists, lawyers and similar professions may have high incomes, but they also typically have large student loans to pay off. This rider will help you pay your student loan payments while you’re unable to work.
- Future increase option. If you expect to earn a higher income in the future, this rider will allow you to increase your coverage in the future, without proving insurability or taking a medical exam.
- Cost of living adjustment (COLA) rider. A COLA rider is another option to consider with long-term disability insurance, as it increases your benefits to align with inflation, which can eat away at your benefits over time.
- Partial disability coverage. This benefit may also be worth adding to your long-term disability insurance policy. A partial disability benefit will pay partial benefits if you’re limited in performing your work duties from an injury or illness that doesn’t cause total disability.
- Catastrophic disability. This disability insurance coverage will pay extra disability benefits if you become severely disabled, so you can cover up to 100% of your income.
Best long-term disability insurance in 2024
The best long-term disability insurance is from Mutual of Omaha, according to our analysis of individual long-term disability insurance policies. It’s the only disability insurance company that earns our 5-star rating.
Mutual of Omaha’s long-term disability policies come with built-in benefits like:
- Survivor benefit if you pass away while receiving disability insurance benefits.
- Transplant donor benefits if you become disabled while donating tissue or an organ.
- Recurrent disability coverage that waives the elimination period if a disability recurs within six months or you become newly disabled within 30 days.
- Premium waiver after you reach the shorter of your selected elimination period or 90 days.
- Coverage suspension if you become activated as a military member.
- Full benefits for your benefit period window if you become permanently disabled.
Whether you’re an employee looking for individual long-term disability coverage, self-employed or a small business owner, Mutual of Omaha is one of the best disability insurance providers for your coverage needs.
Best short-term disability insurance in 2024
Of the companies we analyzed, State Farm is the only provider offering an individual short-term disability insurance plan. The policy will pay up to $3,000 in benefits for one or three years. You can choose a 30, 60 or 90-day elimination period. Its long-term disability insurance policy will pay up to $20,000 in benefits for five years or until age 67.
You can also purchase a long-term policy from Mutual of Omaha or Illinois Mutual with a short-term benefits period of six months. You can get an online quote from these companies, but State Farm doesn’t offer online quotes for disability insurance.
All three disability insurance providers have a strong financial strength rating, which shows they have a solid reputation for being able to pay claims.
What to look for in a long-term disability policy
When comparing long-term disability policies, pay close attention to the benefit period and elimination window.
Make sure your selections align with your savings so you’ll be able to pay your bills and expenses while waiting for coverage to kick in, says Patel. Your benefit period should be long enough to recover from a serious injury or extended illness without returning to work before you’re ready.
Inflation coverage, partial and catastrophic disability benefits, which we discussed above, are important benefits to consider.
A family care benefit — that pays if you take time off or lose income while caring for a loved one who is seriously ill or injured — may also help you decide which long-term disability policy is the best choice.
Understand the definition of disability the insurance company uses.
- Own-occupation coverage will cover you if you can’t perform your job duties, but could work elsewhere.
- Any occupation disability will only pay out if you can’t perform any job tasks at all.
An own-occupation policy may cost more but will allow you to collect benefits while disabled, even if you can work in a different capacity.
How to find the best disability insurance for your needs
The first step to finding the best disability insurance plan is to add up all your monthly expenses, like your mortgage or rent, food, insurance policies, debt payments and utilities. Then, determine what other sources of income are available to pay for them, such as savings, an emergency fund, sick or personal leave time through your employer or your spouse’s income.
Whatever is left over is how much disability insurance coverage you need. You should also consider how long you can hold off on receiving benefits since a longer waiting period will lower your monthly disability insurance premiums.
What is disability insurance and how does it work?
Disability insurance pays you a portion of your lost income if you’re unable to work due to a covered injury or illness.
- Short-term disability insurance covers a percentage of your income for a short time, often three to six months, but sometimes longer.
- Long-term disability insurance can provide some income replacement for years, even into retirement, if you qualify.
You can get disability insurance through your employer as a group policy or directly through a private disability insurance company, either by contacting the company or working with an insurance agent or broker.
Once enrolled in an individual disability insurance plan, you’ll pay monthly premiums based on factors like your age, occupation, income and coverage. If you experience a disabling event like an injury, sickness or pregnancy and cannot work, you’ll get paid a portion of your income until you’re able to return to work or no longer qualify for coverage.
You don’t have to pay back disability benefits and they are not taxable if you pay your premiums with post-tax dollars.
If you have paid Social Security taxes and become too ill or injured to work, you may qualify for Social Security Disability Insurance (SSDI), if you have worked long enough and recently enough. However, it can take up to a year to get approved for SSDI, and it’s not uncommon to get denied, requiring you to apply for reconsideration and start the process over again.
Even if you get approved, the average 2023 SSDI monthly benefit for American workers is only $1,483. You may qualify for more depending on your income, age, gender and other factors.
With more than half of Americans unable to pay a sudden expense of $400 or more, having individual disability insurance may help prevent you from going into debt, losing your home or having your car repossessed.
Best disability insurance FAQs
Disability insurance could be worth it if you don’t have enough other income sources besides your paycheck or self-employment income to pay your bills and expenses.
According to the Social Security Administration, 20-year-olds have a 25% chance of becoming disabled before they reach retirement age. While some may recover quickly, others may never recover fully or at all.
Even if you qualify for SSDI, the benefit amount may not be enough to replace your lost income, which can make individual disability insurance worth it.
The type of disability insurance you should purchase depends on how long you want to cover your lost income.
Short-term disability insurance may be best if you only need to cover up to a year of being unable to work.
But if you work in a high-risk profession, are the primary wage earner in your household or have people who depend on you financially, long-term disability insurance coverage may be a better choice, as it could cover you for partial or total disability through retirement age, depending on the policy.
The types of disability insurance include short-term, long-term and Social Security Disability Income (SSDI).
You can purchase short or long-term disability insurance coverage through a private insurance company or your employer if they offer group coverage as part of your employee benefits package.
SSDI pays eligible workers who have paid Social Security taxes, worked long enough and meet its definition of disability. But you will have to wait five months before you can receive benefits, even if you qualify.
Disability insurance premiums can increase over time, but it depends on your policy type.
- Level premium disability insurance policies offers fixed premiums.
- Graded premium disability insurance policies will gradually increase premiums over time.
Some individual disability insurance policies include a contract clause allowing the insurer to raise premiums for all individuals in an occupational class, but not if you have a non-cancellable policy.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
