Disability Insurance
How much does disability insurance cost?
Individual disability insurance typically costs 1–3% of your annual income. For a 40-year-old earning $100,000/year: a policy replacing $5,000/month with a 90-day elimination period and benefit period to age 65 typically costs $150–$300/month. Key factors affecting cost: age (younger = cheaper), health, occupation (higher-risk occupations cost more), benefit amount, elimination period (longer = cheaper), benefit period (shorter = cheaper), and definition of disability (own-occupation costs more than any-occupation).
Key Points
- Individual disability insurance typically costs 1–3% of annual income
- 40-year-old earning $100,000: $5,000/month benefit typically costs $150–$300/month
- Younger age = lower premiums — buy while you're healthy
- Occupation risk class significantly affects premiums
- Longer elimination period = lower premium
- Own-occupation definition costs more than any-occupation but provides much stronger protection