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
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.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.