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Disability insurance could replace your income if you’re injured or too sick to work.
There are two types of disability insurance: long-term disability and short-term disability. For most people, a long-term disability policy is the most useful, generally kicking in 60 or 90 days after becoming disabled, depending on your policy. This coverage could help you pay your bills and keep afloat if you’re disabled, replacing your income each month up to a limit specified by your policy.
This insurance, sometimes also called disability income insurance, could be a lifeline in a situation where your normal income has been affected. Policies are available directly through insurance companies, or through employers — though the latter coverage tends to be short-term only (we’ll explain more below). In 2018, just 34% of workers had access to a long-term disability plan through their employer, according to data from the Bureau of Labor Statistics. If you’re in the majority, you may need to seek out coverage on your own.
There are many insurers offering disability insurance policies available to anyone, not just through employers, to help you get coverage on your own. Here are the top insurers, their financial credit ratings according to rating agencies Fitch or AM Best, complaint data from the National Association of Insurance Commissioners, and the average policy cost in 2018 from NAIC data.
In this rating, companies with the lowest scores are the strongest — they had the highest credit ratings, the lowest complaint indexes, and the lowest average monthly premiums. Here’s how each company considered stacks up:
Thrivent disability insurance
Pros of a Thrivent disability insurance policy
- Excellent financial strength ratings, and low complaint index from NAIC data
- Lowest premiums of all policies evaluated at about $53 per policy
Cons of a Thrivent disability insurance policy
- No quotes available online, making it difficult to compare prices
Best for: Anyone looking for the best price, who is willing to buy policy through broker or agent
Thrivent took the top spot on this disability insurance list in part because of its incredibly low average premium. The average Thrivent disability insurance policy costs about $53 per month, much lower than the average $137 per month, calculated from NAIC data.
Thrivent also has excellent financial stability ratings, and has very few major complaints. This company is the tenth-largest company in the US for long-term disability policies.
The company offers policies in all 50 states and the District of Columbia. However, quotes aren’t available online, and policies must be bought through an agent or broker.
Assurity disability insurance
Pros of an Assurity disability insurance policy
- Strong financial security ratings
- Policies also available through employers
Cons of an Assurity disability insurance policy
- No quotes or purchasing available online — must be done through an agent
Best for: Anyone who wants to buy a policy through a financial adviser
Assurity is an insurance company that has focused on accident insurance since the 1890s. In addition to disability income insurance, the company offers life insurance, critical illness insurance, and accidental death insurance policies.
The average Assurity disability insurance premium was $71 per month, according to data from the NAIC. While that’s not the lowest cost policy on this list, it’s still much lower than the average. Assurity offers disability insurance through agents, so policies aren’t available online for quotes or purchase. Some employers also offer disability insurance through Assurance.
Illinois Mutual disability insurance
Pros of an Illinois Mutual disability insurance policy
- Low average premium costs
- Quotes available online
Cons of an Illinois Mutual insurance policy
- Not available nationwide
Best for: Workers in skilled trades and paraprofessional careers
Illinois Mutual has been offering insurance policies for over 110 years, mainly specializing in life insurance. But, the company also offers disability insurance in 46 states. According to NAIC data, the average policy carries a premium of $56.90 per month, making it an affordable option.
Illinois Mutual has unique benefits for people who work in trades or paraprofessional careers who may find it hard or expensive to get coverage. Many insurers group occupations into classes which they use to assess risk, with some career classes seen as lower risk. For people in these careers more traditionally seen as risky, Illinois Mutual bumps the class to a higher level for lower premiums.
Unlike many other insurance companies, quotes are available online through Illinois Mutual’s website, but policies must be purchased through an agent. Policies are available in 46 states, and aren’t available in Alaska, Hawaii, California, New York, or the District of Columbia.
RiverSource disability insurance
Pros of a RiverSource disability insurance policy
- This insurance company has a strong track record for financial strength and relatively low in customer complaints.
- Quotes available online
Cons of a RiverSource disability insurance policy
- High average premiums, over $100 per month.
Best for: Current Ameriprise clients
RiverSource is a subsidiary of Ameriprise Financial, one of the largest advisory and asset management companies in the US. In addition to disability insurance, Riversource also offers life and long-term care insurance.
RiverSource’s disability insurance isn’t the cheapest on this list, as the average policy cost $109 in 2018. But, RiverSource has earned a good reputation in other ways, earning high marks for financial stability and receiving few complaints according to NAIC data.
Like Illinois Mutual’s policies, quotes are available online, but policies must be purchased through an Ameriprise advisor. Policies are available in all 50 states and the District of Columbia.
Mutual of Omaha disability insurance
Pros of a Mutual of Omaha disability insurance policy
- Affordable disability insurance from a reputable company
- Available all over the US
Cons of a Mutual of Omaha disability insurance policy
- Policies must be bought through a financial adviser or broker
Mutual of Omaha is one of the larger insurers in the US, and offers life insurance, long-term care insurance, critical illness insurance, and medicare supplement policies. It has the 15th-largest share of disability policies in the US.
Long-term disability insurance through Mutual of Omaha averaged $88.76 per policy in 2018 according to NAIC data.
Mutual of Omaha has earned very high marks for financial security, earning an A+ for financial strength from rating agency AM Best. Policies are available in all US states, and quotes are available online, though policies must be bought through an agent.
Short-term disability vs. long-term disability: What’s the difference?
These two types of insurance differ based on the length of time that the policy covers, and how much you could receive. Short-term disability insurance pays a higher percentage of your salary for a few months. A long-term policy might pay a smaller percentage of your salary, but could pay out until you retire.
You could have access to short-term disability insurance already through your employer — about 42% of private sector employees had access to a workplace short-term disability insurance plan according to the Bureau of Labor Statistics. But these plans only go so far: Long-term disability picks up where your short-term disability and emergency fund savings leave off.
A long-term disability plan often gives the most coverage for the money, making it a practical choice for most people over a short-term disability plan.
Find a company that fits your budget and expectations
Unlike many other types of insurance, you’ll often have to work with a broker or agent to get a policy. That said, it can be hard to compare quotes and coverages.
When possible, start by getting a quote online. Several options on this list offer online quotes. It’s a good way to get an idea of not only how much you’ll pay, but also which companies will be the most affordable.
From there, you can get in contact with an agent. Many companies that sell disability insurance also sell life insurance — bundling a disability policy with your life insurance policy could be a helpful way to bring down costs.
Know the parts of the policy
There are several parts of a disability insurance policy to know and understand. They’ll also affect the price you’ll pay. Here’s what to look for on your quote:
- Elimination period: This is the period you’ll need to wait before your disability policy starts paying out. It’s generally between 30 and 90 days.
- Monthly benefit: This is the amount your policy will pay out each month. Make sure that it meets your bare minimum expenses, or more.
- Premium: How much you’ll pay each month to maintain your coverage.
To find the best policy for you, you’ll want to find an elimination period that fits your emergency savings, and the highest monthly benefit for the lowest premium.
Read more: Policygenius can help you compare disability insurance policies to find the right coverage for you, at the right price »
Business Insider only considered companies that sell individual disability insurance policies, and excluded companies that only sell group policies to employers. Three factors went into the score that ranked these insurance companies, with a lower score indicating a stronger position:
Financial security ratings
Rating companies Fitch and AM Best rate insurers on their financial strength and future outlooks. Business Insider gathered rating information on each insurer assessed, using these ratings to create a score out of 100.
NAIC Complaint Index
The National Association of Insurance Commissioners keeps data on complaints filed against all insurance companies. NAIC calculates the complaint index by dividing a company’s share of complaints by the company’s share of US market premiums.
Business Insider collected these scores, multiplying them by 100 to create a whole number score. A score of 100 in this data set is considered typical, with all companies on this list scoring below 100 in their complaint index.
Average premium in 2018
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Data from the NAIC’s Accident and Health Policy Experience Report provides data on individual insurance companies and each individual line of business. This report includes data on premiums collected through each line of business, and the number of policies issued.
Business Insider divided premiums earned by the total number of policies issued to find the average annual cost of each policy. The annual cost was then divided by 12 to find the monthly cost per policy.
Why trust our recommendations?
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We know that every person’s financial situation is different, and that the best financial product isn’t one-size-fits-all. We highlight the benefits of these insurance products in our ratings, but outline the limitations, too. We’ve spent hours poring over fine print so you don’t have to.
Do I need disability insurance?
For most people, a long-term disability insurance plan is the best way to protect income in the event that you become disabled. The truth is that people can become disabled at any age and for any reason, and having a plan in place can help take the financial strain off.
If you think you have access to coverage through work, look at your policy and make sure that it’s a long-term disability policy with sufficient coverage. In many cases, workplace policies only cover between 40% and 60% of your income. If your employer’s coverage isn’t sufficient, adding another policy on top can help, and continue to protect you even if you switch jobs.
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