Assumptions and Optional Benefits: $50,000 Annual Salary, $2,500/Monthly Benefit, Colorado Resident, Male, Occupation Class 4A, Non-Smoker, 90 Day Elimination Period, To Age 67 Benefit Period, Your Occupation Protection, and Residual/Partial Disability Benefit rider.
The 30 year old in the example above is paying $37.84 per month or around $454 per year for a disability policy with a monthly benefit of $2500. By age 45 this individual would have paid a total of $6,810 in disability premiums. At age 45 this individual also has a 40% chance of suffering a disability with the average length of the disability lasting right around 5.8 years. If at age 45 this individual did suffer a disability and was too sick or too hurt to work, he would only need to collect the $2500 monthly disability benefit for around 2.7 months to break even with the 15 prior years of premium payments.
What can you expect to pay for a disability insurance policy?
You can expect to pay between 1% - 3% of your annual gross income for a quality policy.
Example: If you are earning $50,000 per year you can expect to pay between $500 - $1500 per year depending on your occupation, age and the level of benefits and optional riders that you include on your policy.
Next, determine what your personal budget is for disability insurance. Where does your budget fall between the 1% - 3% of your annual income? Then, let us know what your budget is. We'll work with you to maximize the benefits of your disability policy based on your specific budget.
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computer database searches out the highest-quality disability insurance policies, affordable prices and safest companies. This FREE, detailed online information lets you select the insurance that's right for your short or long term needs at substantial savings - no hassles, no sales pressure. And since all transactions can be handled safely and efficiently over the phone and through the mail, there's no need to meet with a sales person or spend countless hours shopping for disability insurance. Our service allows you to shop in the comfort of your home or office. This service is completely secure, confidential and personalized. Finding the right disability insurance at the right price has never been easier!
How are disability premiums determined?
Disability premiums are based on your age, sex, occupation and the amount of potential lost income you are trying to protect. In general, the lesser the chance that your occupation puts you in harms way, the lower the premium. The higher the chance of injury, the bigger the premium. So, for instance, an accountant working in an office would have much lower disability premiums than a construction worker.
Disability premiums are also based on the specifics of the policy and what additional benefits are added. Does the policy consider you disabled if you can't work in any occupation, or if you can't work in your occupation? Is the policy non-cancelable and guaranteed renewable, or can the insurance company raise the premium or cancel your policy? Optional benefits added to the policy such as inflation protection, residual benefits and the ability to increase your policies benefits at a later date with no medical exam will also change the level of premiums of a disability policy.