Individual Disability Insurance Sample Rates

Long Term Disability Premiums by Age and Gender

Oct 28, 2009

Disability Insurance Premiums for Males Age 40, greenmelinda (Flickr)

Sample premiums rates at age 30 are nearly 12 times cheaper than rates for an individual buying long term disability insurance at age 60.

Long term disability (LTD) insurance rates can vary dramatically based on the industry in which an applicant works. For example, chemical plant workers exposed to industrial chemicals like formaldehyde have much higher disability rates due to cancer than bank employees.

Disability premiums are also higher for applicants who live in areas where insurance companies have assessed less favorable claims experience.

This brief analysis focuses solely on sample premium rate differences due to the age and gender of the individual applying for long term disability insurance.

Rates are from GeoCare International’s optional Long Term Disability Plan for qualified expatriates in the petroleum, engineering and mining industries, and are available worldwide for GeoCare members. However, these sample rates exclude coverage for applicants working in war-torn countries like Afghanistan, Iraq and Somalia.

Sample Male Age Rates for Disability Insurance

Below are sample rates for male applicants from ages 18 to 64 years. Long term disability premium rates for men under age 35 are 11.7 times higher than the rates for senior men age 60 to 64. Typically, disability coverage is not sold to persons age 65 or older.

Males age 18 to 34 years … US$0.81 per $100 LTD Insurance
35 to 39 years … $1.10
40 to 44 years … $1.70
45 to 49 years … $2.34
50 to 54 years … $3.74
55 to 59 years … $5.79
60 to 64 years … $9.44

Sample LTD Premiums for Men by Age

Based on the above male LTD rates, the following monthly premiums required to buy $5,000 worth of LTD benefit coverage were calculated. The annualized premium cost is shown within brackets. A man age 60 can expect to pay almost $5,200 per year more than a 34 year old for the same $5,000 in LTD insurance.

Males age 18 to 34 years … US$40.50 monthly premium ($486 per year)
35 to 39 years … $55 monthly premium ($660)
40 to 44 years … $85 monthly premium ($1,020)
45 to 49 years … $117 monthly premium ($1,404)
50 to 54 years … $187 monthly premium ($2,244)
55 to 59 years … $289.50 monthly premium ($3,474)
60 to 64 years … $472 monthly premium ($5,664)

Sample Female Age Rates for Disability Insurance

Older women also pay much higher premium rates than younger females. In addition, female applicants can expect to pay disability insurance rates that on average are 50% higher than those charged to males of similar ages.

Females age 18 to 34 years … US$1.22 per $100 LTD Insurance
35 to 39 years … $1.64
40 to 44 years … $2.54
45 to 49 years … $3.50
50 to 54 years … $5.60
55 to 59 years … $8.69
60 to 64 years … $14.69

Sample LTD Premiums for Women by Age

The following monthly and annual premiums for $5,000 in long term disability benefit coverage were calculated by multiplying the above female age rates then dividing by the $100 LTD insurance factor. A 60-year-old women is assessed an annual premium of $8,496. That amount that is nearly $7,800 more expensive than the annual LTD cost billed to a 34 year old.

Females age 18 to 34 years … US$61 monthly premium ($732 per year)
35 to 39 years … $82 monthly premium ($984)
40 to 44 years … $127 monthly premium ($1,524)
45 to 49 years … $175 monthly premium ($2,100)
50 to 54 years … $280 monthly premium ($3,360)
55 to 59 years … $434.50 monthly premium ($5,214)
60 to 64 years … $708 monthly premium ($8,496).

Why Individual Disability Insurance Rates Differ by Age

The maximum benefit payment period for an LTD policy is to age 65 or 70. Intuitively, one might expect more moderate rates for someone at age 64 who could only receive benefits for a year under a policy with an age 65 termination.

However, insurance company statistics prove that accident and sickness rates leading to total disability are much higher as the applicant grows older. Higher morbidity rates are used to calculate the increased premiums at older attained ages.

Why Individual Disability Insurance Rates Differ by Gender

For an individual long term disability policy, insurance companies usually quote higher female premium rates because disability claims costs are usually higher for women than men.

In contrast, men and women typically pay the same monthly rates for long term disability coverage under a group policy.

Comparison Shopping Tips for Long Term Disability Insurance

Both male and female consumers should check with a number of disability insurance providers to see whether LTD discount rates are available for non-smokers.

Also, some benefit experts recommend that consumers ask about level premiums that stay constant if plan to keep their disability policy in effect for a long period. Typically, fixed premiums save money particularly in the later years, when age-based rates jump dramatically.

The copyright of the article Individual Disability Insurance Sample Rates in Health Insurance is owned by Daniel Workman. Permission to republish Individual Disability Insurance Sample Rates in print or online must be granted by the author in writing.