Disability Insurance Articles
Determining The Average Cost Of Disability Insurance
2010-07-10
When reviewing disability insurance quotes, you need to keep in mind that several important variables affect the average cost of disability insurance. Disability insurance is regulated by each state, and therefore, rates will vary between states, and even between regions within a state. Your level of income is another variable; the higher your income, the more expensive the insurance. Also, the cost of disability insurance will vary based on some of the options that you might choose, such as the percentage of your income that you want to protect and the length of the waiting period before benefits will be paid.
In order to determine the average cost of disability insurance, you need to start by requesting several disability insurance quotes. The more quotes that you get, the more accurate your estimation of an average cost will be. When requesting quotes, you should make certain that all of the variables are the same for each quote. For instance, you want to ensure that all quotes are from companies writing policies in your state of residence, that you provide the same income figure for each quote, and that you choose the same options in each quote. If the variables are not all the same, you are not comparing equivalent plans, and thus, cannot use the information to come up with an average cost of disability insurance.
Once you have collected all your disability insurance quotes, the math is simple. Add the quoted monthly premiums and then divide by the number of quotes. This figure will be a monthly average cost of disability insurance. Once again, this figure is only meaningful if all of your quotes are for the exact same type of plans and all variables are the same in each quote.
Why is determining the average cost of disability insurance important? By getting an accurate number, you now have a base-line for deciding whether a particular type of plan is within your budget. The average cost figure gives you an idea of whether you can afford disability insurance at your chosen level of protection, regardless of the company that you might eventually choose. If the average cost figure does not work within your budget, you may need to adjust some of the variables. For example, extending the waiting period or choosing a lower percentage of income protection will lower the cost of disability insurance.
Disability insurance quotes can be requested from agents, brokers or websites. Many brokers and online sites will also be able to provide you with quotes from multiple companies. To get started with a request for disability insurance quotes, follow the instructions on this page.