Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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How Much Does Disability Insurance Cost

While the cost of your disability insurance will be based on a number of factors, the base starting point is 1% to 3% of your annual salary. What this means is that if you make $100,000 a year, then you can expect, at the very lowest, to pay between $1,000 and $3,000 annually for your policy.

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The reason that this is just a base cost is that your annual salary is not the only thing that the insurance company will consider when writing you a policy. Read on to learn what factors the insurance company will consider, who should purchase disability insurance, and how to get the best rates on your disability insurance.

Things that Determine the Cost of Disability Insurance

Many factors are used to determine the cost of your disability insurance.

  • Age- For example, your age will play a major part in how much you spend on your premiums. The older you are when you purchase disability insurance, the more you can expect to pay. The cap on most disability insurance policies is 65 years of age, although a few cap at 67. Once you reach this age group, you will be unable to purchase disability insurance.
  • Health- Another factor considered by the insurance company is your general health. While you can purchase a disability insurance policy without a physical, you can expect to pay 3 times more in premiums than you will if you can successfully pass a physical. Even if you have some health issues, if they aren’t too serious, you will pay far less if you choose a policy that requires a physical.
  • Pre-existing Conditions- If you have certain pre-existing conditions , you will not be able to purchase a disability insurance policy. For example, diabetics, Alzheimer’s patients, someone with serious heart conditions and so on will either be unable to purchase disability insurance or may possibly have that condition excluded from their policy; this simply depends on the condition and the insurance company’s policy.
  • Gender- Your gender also plays a role in the premiums you pay for disability insurance. Men, for example, will pay more for their premiums than women will. This is because they are more likely to face heart disease and stroke earlier than women will. As you get older, however, you will find less of a distinction between gender costs.
  • High Risk Jobs- If you have a dangerous occupation, you will find that your premiums will be much higher than if you are a office worker. For example, a pilot may find that it is very difficult to get a disability insurance policy at all, or the pilot will face very high premiums. The same issue applies to construction workers, racecar drivers, lumberjacks and more.

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How does the specific policy impact insurance cost?

You have probably already guessed that the terms of your policy will affect your policy rates as well. For example, many people opt for a three year maximum of coverage because that is the average time a person is out of work due to a disability. This also keeps the premiums very reasonable and easy to afford. If, however, you are concerned about disability that lasts longer, you may want to consider removing that cap.

Another policy factor is how much total coverage you actually want. You can choose to have $50M in coverage with some companies if you want to, but be prepared to pay for it. The company you choose may have a lifetime dollar maximum or may have a time maximum, such as 5 yrs, 10yrs, etc. It is possible to purchase a policy with no maximum payouts at all.

In addition to these issues, cost of your policy will depend on how your insurance company defines a disability . How long you have to be disabled to receive benefits and whether or not you choose a policy that requires you to look for work outside of your current field if you are able.

Something that will increase the cost of your premiums that is well worth having is a non-cancelable and guaranteed renewable policy. While both of these will raise your premiums, having this ensures that your insurance company cannot raise your rates as you get older or having health issues. In addition, it guarantees that they can’t cancel your policy for any reason except for non-payment or fraud.

Who should purchase disability insurance?

The common thread of thought here is that if you have an income, you should purchase disability insurance. There are those, however, who believe that if your income doesn’t contribute to the household expenses, that you don’t need to bother. If your family depends on your income to pay any of the household expenses then you should buy disability insurance, otherwise it is entirely up to you as to whether this offers a true benefit.

Unfortunately, if you are a stay at home parent that doesn’t bring in any income, you will be unable to purchase disability insurance, no matter what your contribution is to the household. Unfortunately, insurance companies don’t put a monetary value on taking care of the kids or the home.

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Can I save money on disability insurance premiums?

One of the first ways that you can save money on your disability insurance is by lowering your coverage amount. You are probably proclaiming that you make $100,000 a year so you should coverage for that amount.

The truth is, however, that you should get coverage for the amount you need to pay your bills rather than the total amount you make. For many people, what they make is what they spend. If, however, you are one of those that saves money every month rather than spending it all, then consider lowering your coverage amount.

Another way to save money is to put a cap on your total benefits. This may not be appealing to many of you, but if you determine a certain amount of days or years that you can receive benefits, this will help to lower your rates. If, however, you are disabled for a longer period of time, you will have no recourse.

Lastly, the best way to save money is to simply make sure you purchase a truly affordable policy. To do this, you are going to need to compare rates between different insurance companies, preferably several companies, so that you can see who offers the lowest rate for the policy that you want.

Compare disability insurance quotes now!

You can achieve this by visiting the websites of several insurance companies in your area and get quotes from each company, but this will be a time consuming process that requires you to provide each company with your personal information, which they will use to contact you about purchasing insurance. There is another alternative, however, that will provide you with the quotes you need without your having to give multiple insurance companies your personal information. This alternative is to use our free insurance quotes tool, which you can link to at the top of this page.

Our quote tool allows you to fill out your information a single time while still getting results from multiple companies. We won’t share or sell your personal information; we will simply use it to ensure you get the most accurate quotes possible. Once you receive your quote and choose an insurance company, you will have to submit to their rules about receiving a physical. Once you are done, you will have the disability coverage that you need.

Type your zip code into the rate box and compare disability insurance quotes today!