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How much does long-term disability insurance cost?

The cost of long-term disability insurance normally depends on your income, age, health, benefit period, and coverage level, as well as other factors.

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Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

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Anna SwartzAnna SwartzSenior Managing Editor & Auto Insurance ExpertAnna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
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Anthony HeAnthony HeDisability Insurance Operations Manager Anthony He is a disability insurance expert and a former Operations Manager at Policygenius. He has 10 years of previous insurance experience and is a licensed agent in the state of New York.

Updated|2 min read

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Long-term disability insurance generally costs 1% to 3% of your annual salary. According to our Policygenius experts, the average rate for a long-term disability insurance policy is around $2,200 a year, but what you pay will depend on details like your income, age, and other factors.

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How much does long-term disability insurance cost?

A long-term disability insurance policy generally costs 1% to 3% of your annual salary. Since disability insurance rates are tied to income, the more money you make, the more it will cost to protect it.

Annual salary

Cost of long-term disability insurance

$75,000

$63 to $188 per month

$100,000

$83 to $250 per month

$125,000

$104 to $313 per month

$150,000

$125 to $375 per month

$175,000

$146 to $438 per month

$200,000

$167 to $500 per month

$225,000

$188 to $563 per month

$250,000

$208 to $625 per month

$275,000

$229 to $688 per month

$300,000

$250 to $750 per month

Collapse table

Is long-term disability insurance worth the cost?

Yes — long-term disability insurance can cost thousands of dollars a year, especially for high-earners, but we think it’s worth it. A disability insurance policy is still one of the most affordable ways to fully protect your future income.

Disability insurance pays out if you’re sick or hurt and can’t work — which is more likely to happen than you might think. More than 1 in 4 20-year-olds will become disabled before they retire. [1]

A long-term disability insurance policy can pay you a significant portion of your income while you can’t work, even if it’s for years, which is especially worth it for people who invested years of training or education in their careers.

What affects long-term disability insurance costs?

There are lots of factors that affect the cost of a long-term disability insurance policy, like:

  • Age: The older you are when you get a policy, the more you’ll pay. 

  • Benefit period: Your benefit period (which means how long you’ll receive disability insurance payments) can be two, five, or 10 years, up to age 65, or for life. The longer the benefit period, the higher your rates.

  • Coverage amount: You’ll pay more for disability insurance if you’re a higher earner since you’re protecting more money than someone with a lower income.

  • Health: If you’re a smoker, or have asthma, diabetes, hypertension, or another condition that makes you more likely to become disabled later on, you’ll probably pay more for disability insurance.

  • Hobbies: If you have any risky hobbies, like skydiving, mountain climbing, or extreme sports, your rates will be higher to reflect the increased risk.

  • Occupation: Your disability insurance rates can depend on your job — if you have a dangerous job your rates will be higher or you may have limited coverage options.

  • Waiting period: Your policy’s waiting, or elimination period, is the time between when you become disabled and when you start receiving benefits. A shorter waiting period means higher premiums.

Since these factors are different for everyone, we recommend comparing disability insurance quotes to get a better idea of what you want in a policy and how much it will cost you.

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Riders and disability insurance costs

The cost of long-term disability insurance also depends on your riders, or the coverages that make up your policy. Adding more riders means your disability insurance will be more expensive.

Some of the most popular disability insurance riders include:

  • Cost of living adjustment: This increases your benefit amount as inflation goes up.

  • Future increase option: If your income goes up in the future, this lets you increase your benefits without needing a medical exam.

  • Own-occupation rider: Allows you to keep your benefits even if you can still do another job, like if a hand injury means you can’t continue being a surgeon but you can still hold a teaching position.

Sample disability insurance policy with riders

Let’s take a look at a sample disability insurance policy for a 31-year-old, and how different riders affect their monthly rate.

A look at the monthly costs of different disability insurance riders.

Cost of long-term vs. short-term disability insurance

Like long-term disability insurance, an individual short-term disability insurance policy usually costs about 1% to 3% of your annual income. However a short-term policy gives you much less protection than long-term disability insurance, since it’s only meant to replace your income for a few months.

Lots of people get short-term disability insurance through work, often for free. But if you don’t already have it as an employer benefit, getting an individual short-term disability policy might not be worth the cost.

What about Social Security?

If you qualify for Social Security Disability Insurance, it won’t cost you anything. But the benefits that you get from Social Security are much less than you get from either short-term or long-term disability insurance.

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How to lower disability insurance costs

Here are some general rules for making sure you get the cheapest long-term disability insurance rates:

  • Avoid risky activities: People without risky habits or hobbies, like smoking or skydiving, will be able to find cheaper long-term disability insurance.

  • Buy disability insurance early in life: Buying a non-cancellable long-term disability insurance policy early in life, when rates are lower, is cheaper than buying one later in life when you’re at a greater risk of becoming disabled.

  • Choose a longer elimination period: Disability insurance costs go down if you choose a longer waiting period between the time you become disabled and when you start to get benefits.

  • Compare rates: Compare disability insurance quotes from multiple companies so you can be sure you get the best rate for your coverage needs (Policygenius can help with this).

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Frequently asked questions

What is the average cost of disability insurance?

You should expect to spend between 1% and 3% of your income on disability insurance, but rates depend on your salary, policy benefits, and other personal details.

How are long-term disability premiums calculated?

Your disability insurance premiums are based on a few factors, including the total amount of your benefits, how long your coverage pays out, your waiting period, age, health, location, and occupation.

Is it worth buying long-term disability insurance?

Yes, it's worth getting a long-term disability insurance policy, especially if you work a highly specialized job and you have a high salary. Disability insurance can help you protect your incomes and keep up with your expenses if they’re disabled and can’t work.

How much does long-term disability insurance pay?

You select how your disability insurance benefits, but generally a policy should pay out about 60% of your gross income.

Do you have to pay back long-term disability payments?

No, long-term disability insurance payments are yours to keep unless an error by you or the insurance company caused you to be paid out more money than you were eligible for.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. Social Security Administration

    . "

    Facts about disabilities

    ." Accessed August 15, 2023.

Author

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Editor

Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

Expert reviewer

Anthony He is a disability insurance expert and a former Operations Manager at Policygenius. He has 10 years of previous insurance experience and is a licensed agent in the state of New York.

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