Quotes for Short Term Disability
Short Term Disability Quotes: Rates and Monthly Premium Cost
Short term disability insurance quotes are available here online in an instant. But before requesting your free cost estimate we want direct you in the right way. Premium rates vary by what you are trying to cover, along with your state insurance rules, industry of your employer, your age, and policy features you select. You have an important choice to make:
Factors Impacting Your Premium Rates
Quotes for short term disability insurance can yield widely ranging premium rate numbers. There are quite a few variables that go into the equation. When making quote comparisons try to equal the playing field as much as possible.
Below are some items to consider, and indications for how each factor may impact the coverage rate you are asked to pay: age, income and benefit level, industry of your employer, state where your policy is issued, the duration of payments, and elimination period chosen.
Monthly Benefit Amount Helps Determine Costs
The monthly benefit amount chosen impacts your monthly cost. In most cases a $4,000 per month policy will cost twice as much as a $2,000 per month, and so on. The rate paid is usually a straight-line projection. You pay a fixed premium per $100 of monthly amount based on the other variables explored on this page.
You qualify for a specified monthly amount based upon your gross monthly earnings. In most states you can purchase up to ⅔ income coverage, capping at $5,000. In states with mandated coverage there may be an offset. You may also have to offset any group plan compensation, or other individual coverage.
How Age Impacts Your Quote
Your age at time of application is a key component of any quote you receive. Most carriers will provide two sets of premium rates:
If you purchase your policy before turning age fifty the premium rate will remain the same even as you age above that number. The amount charged for people starting a policy age fifty or older run about 30% higher. The reason is that older people are far more likely to become sick and use the benefit.
Compare Quotes by Consistent Policy Features
Benefit payment duration is another key factor impacting the cost estimate you might receive. Benefit duration describes how long the policy will continue making cash payments while you remain disabled. A doctor will need to certify that you are unable to work in order for benefit payments to continue.
Many policies allow you to choose between several benefit period lengths: three, six, twelve, and twenty four months. Clearly, the longer the benefits last the more your policy will cost. An interesting note is that premium costs do not double when the benefit duration doubles. Most disabilities are temporary. People recover and return to work. This pattern is reflected in the quotes you will receive.
The policy elimination period is often the variable that most impacts what your monthly cost is likely to be. Short term disability quotes are often expressed in terms of two elimination periods, one for accidents and one for illnesses. Usually the accident elimination period is presented first. You might expect to see combinations such as: 0/7, 7/7, 14/14, etc. You can find elimination periods as long as 180 days coupled with policies containing a 24 month benefit duration.
Accident elimination periods sometimes are as short as zero days waiting, while the lowest you might find for sickness is seven day. Short term disability is not intended to cover simple illnesses such as colds, the flu, and other day to day illnesses. Use your accumulated sick days for these.
Elimination periods for accidents will move your premium cost estimates just a tiny bit. Accident disability coverage is relatively inexpensive. You will find the biggest movement in monthly premium by varying the sickness elimination period.
Rates Depend Upon Employer Industry and State
The industry of your employer impacts your perceived risk. The greater your chance of filing a claim, the more you will be asked to pay in premium. Also, persistency varies widely by industry. Certain industries have higher turnover, which means workers don’t keep their policies as long. Insurers expect that people will only buy and keep policies when they expect to file a claim.
Most short term disability carriers price policies based upon their underwriting experience with differing industry groups. White collar industries such as computer consulting, accounting, and legal are considered lower risk and therefore pay the lowest rates. Other industries have such high loss ratios than carriers will not write coverage: professional sports teams, massage parlors, casinos, etc.
Your short term disability quote will also depend upon the state where your policy may be issued. Many workers live in one state and work in another so this variation may be important. The policy will be issued based upon where and how you purchase your policy.
If you complete your application in front of an agent, your policy will be issued under the state insurance regulations of the state where you signed the application. Online web form applications are becoming quite common. Your home state determines which state variation your policy must adhere to when completing applications online.
Each state has different insurance regulations and mandates. Many states have unique requirements placed on disability insurance policies. Also loss ratios often vary by geography. Expect to see 10% to 15% variations in premium costs based upon where you live or work.