How Much Does Long-Term Individual Disability Insurance Cost?

If an unexpected event happened and you were unable to work, would you be able to pay for your medical costs and loss of income? Luckily, that's what disability insurance is for. If you get seriously ill or injured, long-term disability insurance can pay out a percentage of your salary to help replace your monthly income. 

An independent insurance agent can help you get set up with the right individual long-term disability insurance policy. They can shop and compare policies and rates from multiple carriers to find you the best deal. But first, here's a closer look at long-term individual disability insurance, how much it costs, and more.

What Is Long-Term Individual Disability Insurance?

Disability insurance replaces a portion of your lost income due to a disability, illness, or injury, usually covering between 40% and 70% of your salary. There are several different types of disability insurance that you can choose from.

• Individual long-term disability insurance: This coverage handles long-term injuries, disabilities, and illnesses that keep you from working. This coverage does not pay for work-related injuries or illnesses, which are covered by workers' comp insurance. Coverage can last for years, and sometimes decades, depending on your benefits.
• Individual short-term disability insurance: Just like individual long-term disability insurance, short-term also covers injuries, disabilities, and illnesses that keep you from working. But instead of lasting for years, this coverage only lasts for days or months. A typical coverage term ranges from three to six months.
• Group long-term disability insurance: Group long-term disability insurance is offered through your employer. You can choose to participate in group coverage or opt out. This policy is offered to all eligible employees, and coverage can last for years. Health risk factors are not accounted for since coverage is rated on a group basis, which can be a huge benefit for many employees.
• Group short-term disability insurance: This coverage is just like group long-term insurance in the sense that it's offered through your employer and covers disabilities, illnesses, and injuries. Again, it's offered to all eligible employees, and you may choose to opt out if you so desire. Health risk factors are not accounted for in this disability policy type, and your employer normally pays for this coverage. 

Government-backed disability programs: 

• Social Security Disability Insurance: Also known as SSDI, this coverage is offered by the government and is a federally funded disability benefits program. 
• State disability programs: State disability programs are available in several states across the country and offer temporary disability insurance.

If you're unsure of which type of disability insurance works best for you, a local independent insurance agent can help you make the right choice.

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Why Consider Individual Long-Term Disability Insurance?

Unfortunately, accidents can happen to anyone. If you can't work due to a disability, injury, or illness, you likely still need a stream of income to help you cover your bills and other living expenses. With disability insurance, a percentage of your salary is paid out to you to serve as income replacement.

Many employers offer some kind of group disability insurance, but there are often gaps in this coverage and limitations, which is why an individual policy may suit you better. You can also purchase individual long-term disability insurance even if you're self-employed or currently unemployed. An independent insurance agent can help you get the coverage you need fast.

How Much Does Individual Long-Term Disability Insurance Cost?

In general, individual long-term disability insurance costs about 1% to 3% of your annual salary. While long-term disability insurance typically isn't very expensive, it's important to understand that several factors often make up your premium costs, including:

Gender, Age, and Location

A 51-year-old woman in California may have a different policy rate than a 30-year-old man in Kansas. Your age can factor into your likelihood of developing a disability. 

Your location can increase these odds as well. Large cities are more likely to have car accidents, crime, and hazardous construction, which can lead to a greater risk of injuries, illnesses, and disabilities.

Health Habits and Lifestyle

The insurance company will want to know if you're a smoker or have any other potentially hazardous habits or lifestyle factors. Smoking and drinking can lead to health issues that translate into a disability.

Benefit Period

The longer the coverage payout lasts, the more expensive the policy will be. Short-term disability insurance is, of course, cheaper and usually lasts several months. Long-term disability insurance could have benefit periods that last all the way until retirement. Depending on the insurance company, you may have more benefit period options to choose from.

Benefit Amount

The disability benefit is a percentage of your income. So the larger the salary, the larger the premium. Therefore, paying monthly costs for 60% coverage on a long-term disability insurance policy will be noticeably higher than 30% coverage on a short-term disability policy. 

Choose the best percentage for your financial situation. If you have other financial tools and savings in place, you may be able to lower the percentage of coverage you need.

Occupation

Is your job hazardous or accident-prone? If you suffered from a disability, could you still perform part of your job? These are factors the insurance company considers when determining your premium rates. A lawyer who suffers a back injury can still do much of their work from home. However, a personal trainer may not be able to work at all in this condition. 

Policy Features

When talking with an independent insurance agent, you'll find that the options they bring may have extra features included that could provide more value to the policy, though it may raise your rates. When you talk with your agent, provide them with any details they need to help find the best blend of coverage and cost for your situation. 

Ways to Reduce Your Individual Long-Term Disability Insurance Premiums

If you're looking for ways to reduce the cost of your long-term disability insurance premium, you can always opt for shorter and smaller options in your policy. You can consider a shorter benefit period, such as two years instead of ten. If you choose, you can always extend your coverage later on.

Also, you could set up your disability insurance to pay out a smaller percentage of your income should you need to use it. Many policyholders have disability insurance policies set to receive around 60% of their income. But you could opt to receive a smaller percentage instead to make your premiums lower. Just consider your budget and how much you could reasonably afford if you were unable to work for a period of time. 

Save on Disability Income Insurance

Our independent agents shop around to find you the best coverage.

Find Your Agent

Compare Long-Term Individual Disability Insurance Quotes with an Independent Insurance Agent

If you're looking for individual long-term disability insurance, no one's better equipped to help you find coverage faster than a local independent insurance agent. Independent insurance agents have access to multiple insurance companies, ultimately finding your business the best coverage, accessibility, and competitive pricing while working entirely for you. And in the end, you'll be all set with the ideal long-term disability to match your needs, goals, and budget.