Disability insurance protects your income if you become unable to work due to an illness or injury—but it can also be one of the more expensive types of insurance. The good news is that there are several ways to reduce your disability insurance costs without sacrificing essential protection. This guide breaks down the smartest strategies to secure affordable coverage that still keeps your financial future safe.
Buy Disability Insurance While You’re Young and Healthy
Age and health are two of the biggest factors in disability insurance pricing.
Rates increase when:
- You get older
- You develop medical conditions
- Your job becomes more physically demanding
Applying early helps you lock in lower rates and avoid exclusions for future conditions.
Choose the Right Benefit Amount
Many people overinsure without realizing it. Disability insurance is designed to cover a portion of your income—you don’t need 100%.
Typical coverage: 50–70% of income
To save money:
- Choose a realistic benefit amount
- Avoid max limits if you don’t need them
- Match benefits to essential monthly expenses
You can always increase coverage later if your income grows.
Adjust the Benefit Period Strategically
The benefit period (how long payments last) heavily influences cost.
Options include:
- 2 years
- 5 years
- 10 years
- To age 65 or 67
Choosing a shorter benefit period can lower premiums dramatically.
For many workers, a 5-year benefit period provides strong protection at a much lower price.
Increase Your Elimination Period (Waiting Period)
The elimination period is the time before benefits begin—similar to a deductible measured in days.
Common options:
- 30 days
- 60 days
- 90 days
- 180 days
A 90-day elimination period is typically the best value and significantly cheaper than 30- or 60-day options.
Choose “Any-Occupation” Instead of “Own-Occupation” (With Caution)
Own-occupation provides stronger protection but costs more because it pays even if you can work another job.
Any-occupation is cheaper but more restrictive.
This option can lower your premium, but make sure the savings are worth the tighter rules—especially if you work in a specialized field.
Remove or Limit Optional Riders You Don’t Need
Riders enhance protection but add cost. Common riders include:
- Cost of Living Adjustment (COLA)
- Future Increase Option (FIO)
- Partial Disability Benefit
- Student Loan Rider
- Catastrophic Disability Rider
To reduce your premium, keep only the riders that truly match your situation.
For example, skip COLA if you’re close to retirement or skip FIO if your income won’t increase significantly.
Improve Your Health Before Applying
Health affects disability insurance prices almost as much as it affects life insurance.
Improving your overall health can lower your rate class.
Helpful steps include:
- Lowering your BMI
- Managing blood pressure
- Improving cholesterol
- Exercising regularly
- Reducing alcohol intake
- Quitting tobacco/nicotine
Even small improvements can move you into a better health tier.
Stop Using Tobacco or Nicotine Products
Smoking or vaping increases disability insurance premiums dramatically.
Most insurers require:
- 12 months tobacco-free for non-smoker rates
- Negative nicotine test results upon underwriting
Quitting can lower your premium by 30–50%.
Use Employer-Sponsored Plans When Available
Group disability insurance through an employer is usually cheaper because:
- Rates are shared across many employees
- Coverage is easier to qualify for
- Medical exams are rarely required
If offered, consider maximizing employer coverage before buying supplemental private policies.
Consider an Association or Professional Group Plan
Associations often offer discounted disability insurance rates, including:
- Trade groups
- Alumni associations
- Professional networks
- Business organizations
These plans can cost significantly less than individual policies.
Pay Premiums Annually
Most insurers offer a small discount—typically 3–10%—for paying annually instead of monthly or quarterly due to reduced processing fees.
Maintain a Good Credit Profile (Where Allowed)
Some insurers use credit-based insurance scores when determining rates.
Keeping your credit strong can help you qualify for better pricing.
Reevaluate Your Coverage as Life Changes
You may be able to reduce your premium if:
- Your debts decrease
- Your income changes
- You’ve saved a large emergency fund
- You no longer need certain riders
- You switch to a financially secure job
Right-sizing your coverage can lower long-term costs.