30 Days (Most Expensive)
90 Days (Standard)
180 Days (Lower Cost)
365 Days (Lowest Cost)
Time you wait before benefits begin.
2 Years
5 Years
To Age 65 (Recommended)
To Age 67
How long the policy pays if you are disabled.
No
Yes
Excellent / Preferred
Standard / Average
Minor Health Issues
Maximum Monthly Benefit (60%):$0
Estimated Monthly Premium:$0
Estimated Annual Premium:$0
*This calculator provides an estimation based on general actuarial trends. Actual premiums depend on specific underwriting by the insurance carrier, medical history, and specific policy riders.
function calculateDisabilityRate() {
// 1. Get Input Values
var incomeInput = document.getElementById('diAnnualIncome').value;
var ageInput = document.getElementById('diAge').value;
var gender = document.getElementById('diGender').value;
var occupation = document.getElementById('diOccupation').value;
var elimination = document.getElementById('diElimination').value;
var term = document.getElementById('diTerm').value;
var tobacco = document.getElementById('diTobacco').value;
var health = document.getElementById('diHealth').value;
// 2. Validate Inputs
var income = parseFloat(incomeInput);
var age = parseFloat(ageInput);
if (isNaN(income) || income <= 0) {
alert("Please enter a valid annual income.");
return;
}
if (isNaN(age) || age 75) {
alert("Please enter a valid age between 18 and 75.");
return;
}
// 3. Logic Configuration
// Calculate Target Benefit (Typically capped at 60% of gross income)
var monthlyIncome = income / 12;
var benefitAmount = monthlyIncome * 0.60;
// Base Rate (Cost per $100 of monthly benefit)
// Starting approximate base for a standard risk
var baseRatePer100 = 2.00;
// Age Factor (Prices rise significantly with age)
// Base age 25. Increase factor by roughly 3-4% per year.
var ageDiff = age – 25;
var ageFactor = 1.0;
if (ageDiff > 0) {
ageFactor = 1 + (ageDiff * 0.035);
}
// Gender Factor
// Unlike Life Insurance, Disability is often more expensive for women due to higher morbidity/claims.
var genderFactor = (gender === 'female') ? 1.4 : 1.0;
// Occupation Factor (Risk Class)
// 4A is safest (lowest rate), A is riskiest (highest rate).
var occFactor = 1.0;
if (occupation === '3A') occFactor = 1.25;
if (occupation === '2A') occFactor = 1.60;
if (occupation === 'A') occFactor = 2.20;
// Elimination Period Factor (Waiting Period)
// 90 days is standard (1.0). Shorter wait = higher cost.
var elimFactor = 1.0;
if (elimination === '30') elimFactor = 1.50;
if (elimination === '180') elimFactor = 0.90;
if (elimination === '365') elimFactor = 0.85;
// Benefit Period Factor (Term)
// Age 65 is standard (1.0). Shorter term = lower cost.
var termFactor = 1.0;
if (term === '2') termFactor = 0.55;
if (term === '5') termFactor = 0.75;
if (term === '67') termFactor = 1.05;
// Tobacco Factor
var tobaccoFactor = (tobacco === 'yes') ? 1.25 : 1.0;
// Health Factor
var healthFactor = 1.0;
if (health === 'preferred') healthFactor = 0.85;
if (health === 'substandard') healthFactor = 1.50;
// 4. Final Calculation
// Formula: (Benefit / 100) * Base * (All Factors)
var totalFactor = ageFactor * genderFactor * occFactor * elimFactor * termFactor * tobaccoFactor * healthFactor;
var estimatedMonthlyPremium = (benefitAmount / 100) * baseRatePer100 * totalFactor;
// 5. Display Results
document.getElementById('diResults').style.display = 'block';
// Format currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
document.getElementById('diMonthlyBenefit').innerText = formatter.format(benefitAmount);
document.getElementById('diMonthlyPremium').innerText = formatter.format(estimatedMonthlyPremium);
document.getElementById('diAnnualPremium').innerText = formatter.format(estimatedMonthlyPremium * 12);
}
Understanding Your Disability Insurance Rates
Disability insurance (DI) acts as paycheck protection, providing a portion of your income if you become too sick or injured to work. Unlike health insurance, which pays doctors, disability insurance pays you. Understanding how rates are calculated can help you structure a policy that fits your budget while providing adequate coverage.
Key Factors Influencing Your Premium
Insurance carriers use actuaries to determine risk. The higher the statistical likelihood of you filing a claim, the higher your premium will be. Here are the primary variables used in our calculator:
Factor
Impact on Rate
Occupation Class
This is often the biggest factor. Jobs involving manual labor or hazardous environments (Class A) have much higher rates than office-based professions (Class 4A/5A) due to the higher risk of physical injury preventing work.
Age
Premiums increase as you age. Purchasing a policy in your 30s locks in a much lower rate than waiting until your 40s or 50s, as health issues tend to arise with age.
Gender
Statistically, women file more disability claims than men (often due to pregnancy and autoimmune conditions), resulting in slightly higher premiums for females in many jurisdictions. Note: This is the opposite of life insurance, where men usually pay more.
Elimination Period
This is your "deductible" measured in time. It is the number of days you must be disabled before checks begin. A 90-day waiting period is the industry standard. Selecting a 30-day wait will increase premiums significantly, while a 180-day wait can lower them.
How Much Coverage Do You Need?
Most carriers limit coverage to roughly 60% of your gross annual income. This is because benefits paid on policies paid for with after-tax dollars are typically tax-free. If insurers covered 100% of your income, there would be little financial incentive to return to work.
Example: If you earn $100,000 annually, your gross monthly income is $8,333. A typical policy would provide a monthly benefit of roughly $5,000.
Short-Term vs. Long-Term Disability
Short-Term Disability (STD): Usually covers 3 to 6 months. It is often provided by employers. Individual policies for STD are rare and expensive.
Long-Term Disability (LTD): Designed to cover you for years (typically 5 years or to age 65). This calculator focuses on Long-Term Disability rates, as this is the most critical coverage for financial planning.
Policy Riders to Consider
While the calculator provides a base estimate, adding "Riders" (optional features) will increase the cost. Common riders include:
Own-Occupation: Pays if you cannot perform the duties of your specific job, even if you can work another job. Essential for specialized professionals like surgeons or trial lawyers.
COLA (Cost of Living Adjustment): Increases your benefit amount annually while you are disabled to keep up with inflation.
Future Purchase Option: Allows you to increase coverage later as your income rises without undergoing a new medical exam.
Strategies to Lower Your Rate
If the estimated premium is higher than your budget allows, consider these adjustments:
1. Extend the Waiting Period: Moving from a 90-day to a 180-day elimination period can drop premiums by 10-20%.
2. Adjust the Benefit Period: Instead of coverage to "Age 65," a "5-Year Benefit Period" is significantly cheaper, though it carries more risk if you suffer a permanent disability.
3. Ladder Coverage: Combine a smaller private policy with your employer's group coverage to reach your desired income replacement level.