Disability Insurance Rates: What Will I Pay?

Many people, even those who know disability insurance is a great idea, don’t know what to expect from disability insurance rates.

That’s largely because it’s not easy to simply throw out a number. Rates very person-to-person, depending age, income, occupation, and whether or not you smoke.

There are a few factors that influence your disability insurance rates. 

Personal Factors that Affect Your Disability Insurance Rates


We all become more likely to become disabled as we get older. Because of that, disability insurance rates increase as we age.

Remember: Your cost for disability insurance will probably never be lower than it is today.


The term “disability insurance” is really a bit of a misnomer. It might better be called “income insurance.” Because it protects your income, it pays more for those with a higher income. This means disability insurance rates are higher for those who make more money.

Generally speaking, disability insurance (or income insurance) costs anywhere from less than one to three percent of your gross annual income.

Here’s how that might break down:

$30,000 income = $300 to $900 per year = $20—$74 per month

$50,000 income = $500 to $1,500 per year = $40—$125 per month

$200,000 income = $2,000 to $6,000 per year = $165—$500 per month


People who smoke have a higher risk for disability. Those who smoke, can, according to the National Association of Health Underwriters, “expect to pay as much as 25 percent more for the same protection as a non-smoker.”


Workers are assessed based on the physical demands or risk of a job. For example, those who work in an office setting will pay less for disability insurance than physical laborers.

Policy Factors that Affect Your Rates


Different policies define disability differently. The question is whether you’re unable to do your job, or whether you’re unable to do any job. The more liberal the definition, the more expensive the disability insurance rates.

As ConsumerReports.org explains, “A policy that covers ‘own occupation’ disability will pay benefits if you can’t perform the exact job you held before you became disabled, even if you can still do other work.”

Policies that cover “loss of earnings” disability will cover the difference between what you made before and after your disability. “Any occupation” policies only pay if you are unable to do any work.


Your policy’s cost will vary depending on your income, but not all disability policies pay at 100 percent of your income.

Some pay only a percentage. The closer your policy comes to paying at 100 percent, the higher your disability insurance rates.


The elimination period is also known as the “waiting period.” It’s the length of time that must pass between when you become disabled and when your policy will begin to pay.

Policies may have 30-, 60-, or 90-day elimination periods. Policies with shorter elimination periods cost more. 


The benefit period of your policy is the amount of time your policy will pay out after the elimination period.

Some of the most common benefit periods:

  • Two years
  • Five years
  • Until the age of 65
  • Lifetime 

Policies with longer benefit periods cost more.

Another Factor that Can Affect Your Rates


Your employer may offer group disability insurance as part of its benefits package (depending on the state, it may even be required by law).

If it’s an employer-sponsored plan, your employer may pay all or part of the premium.

That means means you’d pay a lower rate—or none at all.

Premiums are also typically lower with a group-negotiated rate than when purchased individually.

What’s Next?

Now that you understand the basics of how disability insurance rates are figured, the next step is digging into what coverage you might need.

Need help? Reach out to one of our member companies—they’re experts at helping sort out the details.

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