Disability insurance protects your income if you become unable to work due to injury or illness. It’s one of the most important — and often overlooked — types of insurance for both employees and self-employed professionals. But the cost of disability insurance can vary widely from person to person.
Understanding what affects your disability insurance rates will help you choose the right coverage, avoid unnecessary costs, and make informed decisions about protecting your financial future.
Below are the major factors that influence your premium.
Your Occupation
Your job is one of the most significant factors in disability insurance pricing.
• High-risk jobs (construction, electrical work, roofing, manual labor) have higher premiums
• Medium-risk jobs (sales, retail, light physical work) fall in the middle
• Low-risk jobs (office workers, tech, administrative roles) have the lowest premiums
Insurers classify occupations into risk tiers because some lines of work have a higher likelihood of disability claims.
Your Age
Age plays a major role in disability insurance costs.
• Younger applicants pay the lowest premiums
• Rates increase each year you wait to purchase
• Buying coverage early locks in long-term savings
The ideal time to secure disability insurance is early adulthood, before health changes occur.
Your Health and Medical History
Disability insurers evaluate your current health, medical records, and prior conditions.
Underwriting may consider:
• Past injuries
• Chronic illnesses
• Surgeries
• Prescription medications
• Mental health history
• Body mass index (BMI)
• Family history (for certain conditions)
Healthier applicants qualify for lower rates and more favorable policy terms.
Tobacco and Nicotine Use
Smoking, vaping, and other nicotine products increase disability insurance rates significantly.
• Smokers may pay 25–50% more
• Rates decrease only after a long period of being nicotine-free (typically 12–24 months)
Avoiding nicotine is one of the most impactful ways to reduce your premium.
Income Level and Coverage Amount
Disability insurance replaces a portion of your income — so higher earners pay higher premiums.
• More income = higher benefit amount
• Most policies insure 50%–70% of your income
• Higher maximum monthly benefits cost more
Your benefit amount should match your financial needs, but not exceed them.
Benefit Period
Your benefit period affects price dramatically.
• Short-term coverage (3–6 months) costs the least
• Long-term coverage (2–10 years) is moderately priced
• Until-retirement coverage costs the most but offers full protection
Choosing the right benefit period balances affordability and long-term security.
Waiting Period (Elimination Period)
This is how long you must wait after becoming disabled before benefits start.
• Short waiting periods (30–60 days) = higher premiums
• Longer waiting periods (90–180 days) = lower premiums
• Most long-term disability plans use a 90-day elimination period
A longer waiting period helps reduce overall cost.
Policy Type: Short-Term vs. Long-Term
• Short-term disability covers brief injuries or illnesses
• Long-term disability covers more serious or lasting conditions
• Long-term disability insurance costs more because it provides broader protection
Most financial planners recommend prioritizing long-term coverage.
Optional Riders and Add-Ons
Riders enhance your coverage but increase your premium.
Common riders include:
• Cost-of-living adjustment (COLA)
• Own-occupation coverage
• Future increase option
• Partial disability benefits
• Residual benefits
• Catastrophic disability rider
• Student loan protection rider
Choose riders carefully to avoid unnecessary costs.
Your Gender
Many insurers price disability insurance differently by gender.
• Women often pay higher rates due to higher claim frequency
• Men typically pay less for the same coverage
• Some group or employer plans use unisex rates (equal for all genders)
If available, unisex pricing can lead to major savings for women.
Employment Status (Employee vs. Self-Employed)
Your work structure affects underwriting and pricing.
• Employees may qualify for lower rates due to stability
• Self-employed workers often pay more due to variable income
• Employer-provided disability plans may offer group discounts
If you’re self-employed, keeping accurate income records helps secure better rates.
State of Residence
Your location influences disability insurance costs because:
• Medical costs vary by state
• Local regulations differ
• Some states have more competitive insurance markets
Urban areas sometimes have slightly higher premium averages.
Claims History
If you’ve filed disability claims in the past, you may see:
• Higher premiums
• More restrictive policy terms
• Additional underwriting questions
Maintaining strong preventive health habits helps minimize future rate increases.
How to Lower Your Disability Insurance Rates
Although you can’t control everything, there are many practical ways to reduce your premium:
• Maintain strong overall health
• Avoid tobacco or nicotine products
• Choose a longer elimination period (90–180 days)
• Start with a lower benefit amount and increase later
• Keep only the riders you truly need
• Shop quotes from at least three insurers
• Take advantage of employer-provided or group plans
• Purchase coverage early before health changes arise
• Provide accurate income documentation
• Choose a policy with a reasonable benefit period
A well-structured disability insurance plan gives you financial peace of mind without overspending.