There are three major ways to keep down disability insurance premium costs:
- Elect a longer waiting period before benefits begin – If you have enough resources to cover expenses during the first three months (90 days) of disability, your premiums will be lower than if you opt for coverage where the benefits would start after 30 days.
- Elect a shorter benefit period – Shortening the duration of a potential benefit period will also save money on a disability policy. That said, a long-term disability poses a great risk of financial hardship, so it's important not to pinch pennies when an insurance payout could make a huge difference in your quality of life. For example, if you're well set up for retirement, you might elect to have long-term benefits that are payable to your retirement age of 65 instead of opting for lifetime benefits.However, policies that offer a benefit period of two-to-five years, ending before normal retirement age, might save money you on premiums, but could cost you valuable coverage when you need it most.
- Opt for a lower percentage of income replacement – If you have robust enough assets or can rely on other sources of household income in the event you're disabled, getting a policy that replaces a lower percentage of your taxable income may help you save on premium costs.
Next steps: Learn all about buying disability policies.