What affects the cost of disability insurance?
If you come to the conclusion that you want to purchase a disability insurance policy, one of the first questions you will have is “how much does it cost?”
While this is an important question to answer, you don’t want it to stop you from getting the right coverage.
If you are purchasing your own disability insurance policy, as opposed to receiving coverage through your employer, there are many factors that affect the cost. Knowing what these are will allow you to find and purchase coverage that fits your budget.
Some of the factors impacting your premium include sex, age, occupation, and the amount of income you want to replace in the event of a claim.
For example, if you work in a risky and dangerous career field, you can expect to pay more for coverage than somebody who sits in an office all day.
Note: the length of the waiting period also has an impact on your premium cost. If you want to lower the cost of coverage, opt for a longer waiting period.
Every disability insurance company is different, so the quote you receive from one may not be exactly the same as another. This is why it is important to compare quotes and coverage options.
Even though searching for disability insurance based on coverage is important, don’t overlook other details, such as the reputation of the company. You don’t want to purchase from a company with a poor reputation, as this could lead to issues in the event that you need to make a claim at some point in the future.
Source: Fisher Financial Strategies, “Disability Insurance: How Much to Get, What Affects Premium Costs,” accessed June 20, 2016