5 Factors That Affect Disability Insurance

Taking out a disability insurance policy is a smart way to protect yourself in case you can’t work for a while. When sickness or an accident forces you to stay home and heal for a few weeks or longer, having this income protection is a lifesaver.

For most people, disability income replacement insurance is an affordable form of peace of mind. A small percentage of their monthly income ensures that if they are unable to work, they’ll still get paid while they recover.

What your insurance covers and how much it costs you will vary, depending on factors like your annual income, job, and benefit level. 

In fact, even if you’re the same age and in the same income bracket as your friend, the two of you could have completely different premiums. 

As you begin to search for the best disability insurance policy, remember that these five factors will play a role in your coverage.

1. Your Job

The primary factor in the kind of disability policy you can get is your occupation. Most companies will charge high premiums to people with jobs that are considered significantly hazardous. 

You might be surprised to see which careers are on this list. The Bureau of Labor Statistics keeps track of how many people die each year from work-related injuries. 

Jobs in law enforcement, working on power lines, and aircraft pilots are obvious. Other roles listed, including landscaping and fishing, might be unexpectedly labeled “hazardous.”

Yet, the more hazards that are involved in your daily job description, the higher the premium will be. If a strain or sprain prevents you from being able to work, your insurance policy rates reflect it.

2. Your Health

Part of your insurance coverage depends on your overall health. Anyone with a history of certain medical conditions that could be disabling would have higher premiums. In some policies, any pre-existing medical conditions could be excluded altogether. 


Health risks also include activities you engage in regularly. If your hobbies include extreme sports or frequent flying, for instance, impact your policy.  Most likely, your insurer will either increase your premium or exclude the pursuit.

Make sure you read the fine print before signing a policy. Some companies will also eliminate coverage of major medical conditions like diabetes and cancer.

3. The Policy Benefits

How the insurance company determines policy rates using your job and health is out of your hands. However, if you’re looking for the cheapest policy, you can always adjust the benefits.

For example, the rate of pay you receive should you need to use your disability benefits may vary. This amount is called the monthly indemnity and is usually around 60% of your pay. 

People who want more than the average can shop around for insurers that offer higher indemnity coverage, but the premium will be higher.

Policies that cover total or partial disability will be less expensive than those that include both. 

Talk to your agent about the types of benefits you can choose to include or leave out and how much each one affects the rates. You may decide it’s worth the extra pennies on the dollar to have more coverage.

4. The Elimination Period

Your policy won’t kick in the same day you’re injured. It makes sense: The insurance company needs evidence that you’re actually disabled before they start paying your benefits.

The time between your injury or illness’s inception and when the policy pays is called the elimination period. The type of policy you chose determines this time frame and can range from 30 days to two years. The shorter the waiting period, the higher your policy rates would be.

The general suggestion is to have a short elimination period if you’re going to need your income to kick back in quickly. But if you have six months of savings or more in the bank and other revenue streams, you can get away with a longer waiting period.

5. The Benefit Period

The last major factor that affects your insurance coverage is the benefit period itself. How long do you want the policy to continue paying your monthly indemnity if you’re out of work?

As with the elimination period, this length can vary substantially. The typical range is anywhere from two years to a lifetime.

The length of time the insurance company will be paying you if you’re disabled impacts the premium you pay.


Disability insurance coverage is a strategic form of asset protection. It’s even vital if you are the primary provider of income in your home. 

How much coverage you’ll need varies based on your job and lifestyle. But these five factors will affect the insurance type and premiums you can expect.