How much does long term disability insurance cost?

Long-term disability insurance costs anywhere from $5 to $175 per month, depending on your age, gender and desired monthly payout. How long you have to wait between a covered event and getting paid matters, too, as does the length of time you’ll be receiving benefits.

Although numerous factors affect the cost of long-term disability insurance, even averages based on the most general characteristics can give you a good sense of whether taking out a policy is worth it.

Here’s how much long-term disability insurance costs per month:

Source: The American Institute of CPAs. Assumptions: Total disability coverage with a 13-week waiting period.

In case you’re wondering, disability insurance costs more for women than men because women typically file more claims. Older people and smokers also tend to pay more for similar reasons.

The price of long term disability can range anywhere from 1% to 3% of your current annual salary.  The price honestly varies per individual.  There are a lot of factors that go into the final cost.  While there are several websites that will compare long term disability options and price quotes, it is strongly suggested that you do not just go into it blindly and pick the cheapest policy. 

Here are some factors that will play a major role in the cost of your long term disability insurance plan:

·Age: The longer you wait to take out a disability policy the higher the premium cost will be.

·Smoking status: Smokers are often quoted a higher premium then non-smokers

·Health conditions: Not only do pre-existing conditions make the premium on long term disability insurance larger, they also may not be covered for the first year.  Make sure you read the fine print of any policy before buying.

With all of these factors in mind, let’s give a few examples of what a long term disability insurance premium may look like.  For a healthy 35 year old, non-smoking male who makes around $55,000 per year, a premium could range anywhere from $550 to $1650 per year.  For a 50 year old male who has had ongoing diabetic problems for the last five years, he may be looking at a premium of anywhere from $1650 to $2750 a year. 

It will also vary based on what type of waiting period one is looking at.  Waiting periods can range anywhere from 30 to 90 days.  For a 30 day waiting period, you could be looking at several hundred dollars more than for a 90 day waiting period.

One additional cost that you may want to consider is adding a cost-of-living rider to your policy. This is an incredible benefit if you were to become disabled within the next couple of years.  With the cost of living constantly going up, this would guarantee you an increased annual benefit.  Keep in mind though that if you did add this in it will increase your premium between 20 and 40 percent.  So make sure to weigh the pros and cons of this.

Long term disability can be affordable, but please ensure that you do your homework before deciding on a policy.  Many factors go into the cost and most of the time you have no control over these factors.  With the right policy though, you can get what you want at a reasonable price.  Most long term disability insurance premiums average around $1000 a year.