How Much Does Disability Insurance Cost?

how much does disability insurance cost

Disability insurance is priced according to several factors. The price will be according to the elimination period. benefit period. age, optional riders. premium structure, occupational class. gender, state, health, benefit amount, and type of coverage. As a rule of thumb, you could expect to pay between 1-3% of your annual income for a quality disability insurance plan. The price could end up being more or less than 1-3%, but on average we strive to structure a policy that fits into this cost.

As you can see, there are multiple factors listed above that go into determining the overall cost of your Berkshire disability insurance policy 1. While you cannot control some of the factors such as age, gender, state, health history, and occupational class, there are many decisions that you can make to help control the final price you are going to pay.

Choices You Can Make To Control The Final Price

4. Premium Structure

This is a fairly simple decision to make when you buy a policy. You can choose to have a level premium structure, or a graded premium structure. A level premium structure means that the price you pay when you buy the disability insurance contract today will be the same price every year you own the policy. Rates will never change, this is one of the best aspects of buying a disability insurance policy today while you are the youngest you will ever be. If you bought a DI policy at age 32 with a level premium structure, you would pay rates based on a 32 year old for as long as you owned the policy. The other choice you can make is the graded premium structure which is initially much less expensive than a level premium, but the price goes up every year you own the policy. Younger professionals tend to buy a graded premium structure DI policy while money is tight, but we recommend that you convert this to a level premium policy as soon as you are able to lock in your rates. Graded premium disability insurance

policies are very common with resident physicians .

5. Benefit Amount

This is one area that tends to cause some confusion with people buying disability insurance for the first time. Individually owned policies do not work on percentages of income, you purchase a specific monthly benefit amount. The amount you can buy is determined by each insurance company's issue and participation limits. They have a chart that shows the maximum monthly benefit a person can buy based on income levels. That does not mean that you have to buy the maximum amount you are eligible for, you can buy as little as $500 a month if that is what you want or need. Our advice is to purchase the maximum level you qualify for, and can afford because we believe that disability insurance is the most important financial services product anybody can own. Your ability to earn an income is your most valuable asset, and DI is the one product that protects this asset. Having said that, if you need to reduce the overall cost of your policy, reducing the monthly benefit will have a large impact on the price you pay.

6. Type of Coverage

There are two policies offered by Berkshire that are designed to protect your personal income and lifestyle; ProVider Plus and ProVider Plus Limited. Both of them do an excellent job of making sure that if you suffer an illness or injury that prevents you from working, that you will have a source of revenue to protect your family and your lifestyle. ProVider Plus is the top tier contract and is going to cost more than the ProVider Plus Limited. Please feel free to review both of the articles we linked to describing both of these options so you can understand the differences. ProVider Plus is designed to be the most comprehensive disability insurance policy in the industry paying you the most claims in the most possible claims scenarios. ProVider Plus Limited is also an excellent policy, but some benefits are not as comprehensive in order to save money.


Category: Insurance

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