The Cost of Disability Insurance For Individuals In 2020

The Risk of A Disability

Data from the Council for Disability Awareness shows that one in four 20-year olds will eventually become disabled before they enter the retirement phase of their lives. The type of disability could be related to an injury or a less-serious and temporary illness. Still, they will qualify as unable to work, which in other words, can be described as disabled.

The Cost of Disability Insurance For Individuals In 2020

About 25 percent of the employees that have just finished college and started their career will eventually fall into the disability insurance group, so it’s essential to look at the facts. What is also shocking is that you can have a healthy female, about 30 years of age, with a 24% chance of becoming disabled in the upcoming months, and 38% of these employees will be disabled for longer than five years. On the contrary, men have a 21% chance of becoming disabled for at least three months, while the same percentage of 38% have the possibility of being disabled for longer than five years.

How Are Your Rates Calculated?

The cost of insurance is based on a risk to reward ratio. Still, the average cost of personal disability insurance in both short-term and long-term is 1-3 percent from the individual’s annual gross income.

This means that if a person makes about $100,000 a year in gross income, that person will pay from $1000 to $3000 a year for Disability insurance for individuals. Of course, this assumes that the person is under the age of 45 and works at a job with minimal risks. On the other hand, the premiums for personal disability insurance for individuals can cost up to 15% of the annual gross income. This is especially the case if they are over the age of 45 and in a higher-risk job such as airline pilots or construction workers.

On the low end, if the person is less than 30 years old and works in a mostly stationary environment, they will pay less than 1 percent of the annual gross income. Disability insurance for individuals represents a policy that pays the insured benefits to replace the income once they are out of work due to an injury or an illness. There are long-term and short-term policies that cover the length of time that the person will stay home and not work.

Both employees and business owners need this type of insurance. Many of these people have small savings accounts or none at all that will be depleted fast if the individual is to become disabled. Of course, the insurance does not provide 100% of what the employees make when working, but Personal disability insurance is much needed to fill the time not spent working.


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