Ltd Premium Calculator
Long-term disability (LTD) insurance replaces part of your income if illness or injury keeps you from working for months or years, and its premium is not a flat percentage of salary. Insurers price it from your age, gender, occupation class, waiting period, benefit period, the legal definition of disability and your health, and this calculator follows that same structure so you can see what each choice costs before you ask anyone for a quote.
Monthly premium
$0.00
| Monthly benefit amount | |
|---|---|
| Base premium rate (per $100 of benefit) | |
| Annual premium | |
| Premium as % of salary | |
| Total premium over 10 years | |
| Income replacement ratio | |
| Maximum monthly benefit |
Estimate only. Actual premiums vary by insurer, state, and medical underwriting.
Quick Answer
A 35-year-old man in a professional or office job, earning $60,000 and replacing 60% of it, with a 90-day elimination period, benefits to age 65 and an own-occupation definition, pays an estimated $24.38 a month ($292.50 a year, 0.49% of salary) for a $3,000 monthly benefit. The same policy for a 45-year-old woman doing heavy manual work costs $90.00 a month. The calculator above is pre-filled with the first case, so you can reproduce both numbers yourself.
- Quick Answer
- How to use this LTD premium calculator
- Worked example: $60,000 salary at age 35
- How each policy choice moves the premium
- The formula and the rate table behind it
- Group cover vs an individual policy
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use this LTD premium calculator
Enter your salary and the policy design you are considering, then read the rate per $100 alongside the premium: the rate is the number you can compare against a real quote.
- Salary and benefit percentage. Start with gross annual pay and the share you want replaced. Sixty percent is the standard individual policy because benefits from a policy you pay for yourself are usually tax-free, so 60% of gross lands close to your normal take-home pay. If you are still deciding how much benefit you need, work that out first with the disability amount calculator, then price it here.
- Age, gender and occupation class. Pick the class that honestly matches your work. Pricing a roofer as an office worker produces a fantasy number, because occupation class is built from real claim frequency.
- Elimination and benefit periods. Match the elimination period to the savings you could actually live on: 90 days needs roughly three months of expenses in reserve, 365 days needs a year. A longer benefit period matters most when you are young, because a disability at 35 can run for decades.
- Definition, riders and health. Own-occupation wording is the default here because it is the definition most individual buyers choose. Add a COLA rider if the benefit might be paid for many years, and answer the smoking and health questions the way an underwriter would see them.
- Read all eight result lines. The monthly benefit is capped at $15,000; the base rate is the fully adjusted price per $100 of monthly benefit; and the maximum monthly benefit line shows the separate 80%-of-income ceiling insurers apply, so you can see if your chosen percentage runs into it.
Worked example: $60,000 salary at age 35
The worked example prices a standard individual policy and lands at $24.38 a month; every step below is arithmetic you can repeat by hand.
- Monthly income: $60,000 / 12 = $5,000.
- Monthly benefit: 60% of $5,000 = $3,000, under the $15,000 cap.
- Base rate for a 35-year-old man in occupation class 1 (professional / office): $0.65 per $100 of monthly benefit, straight from the rate table below.
- All other factors are neutral (90-day elimination 1.00, to age 65 1.00, non-smoker, standard health, no riders) except the own-occupation definition at 1.25, so the adjusted rate is $0.65 × 1.25 = $0.81 per $100 (the unrounded rate is 0.8125).
- Monthly premium: ($3,000 / 100) × 0.8125 = $24.38. Annual premium $292.50, which is 0.49% of salary, and $2,925.00 over ten years.
- Income replacement ratio: 60.0%. Maximum monthly benefit: 80% of $5,000 = $4,000.00.
That 0.49% sits below the 1 to 3% of income that individual LTD commonly costs, and the reason is the profile: young, desk-based, standard health. Change the profile and the same tool moves into the textbook range fast, as the next section shows.
How each policy choice moves the premium
The elimination period is the strongest lever most buyers control, and occupation class is the strongest factor they do not: the table below changes one thing at a time from the worked example, and every figure is a real run of the calculator above.
| Change from the worked example | Monthly premium | Annual premium |
|---|---|---|
| Baseline: 90-day wait, own-occupation, to age 65 | $24.38 | $292.50 |
| Elimination period shortened to 30 days | $32.91 | $394.88 |
| Elimination period lengthened to 365 days | $17.06 | $204.75 |
| Benefit period cut to 2 years | $14.63 | $175.50 |
| Any-occupation instead of own-occupation | $16.58 | $198.90 |
| Smoker instead of non-smoker | $29.25 | $351.00 |
| Compound COLA rider plus residual benefit | $34.86 | $418.28 |
| Substandard health rating | $36.56 | $438.75 |
| Same policy at age 40 (interpolated rate) | $34.69 | $416.25 |
| Same policy, 45-year-old woman, heavy manual work | $90.00 | $1,080.00 |
Two lessons stand out. First, waiting longer before benefits start is cheaper than shrinking the benefit itself: the 365-day wait saves 30% while keeping the full $3,000 benefit intact for a long claim. Second, age compounds quietly: at 40 the interpolated base rate is $0.925 instead of $0.65, and nothing about the policy changed except five birthdays.
Key takeaways
- The premium is a rate per $100 of monthly benefit, multiplied up. Compare quotes on the rate, not just the monthly total.
- A longer elimination period is the cheapest saving available, provided your savings can bridge the wait.
- Own-occupation wording costs 25% more here and is usually worth it: it is the definition that pays when you lose your actual career.
- Age, gender and occupation class set the base rate before any policy choice is priced, which is why two people with the same salary can pay three times apart.
The formula and the rate table behind it
The tool prices a policy in three steps: size the benefit, look up a base rate, then multiply that rate by one factor for each policy feature.
Step 1, the benefit. Monthly benefit = (annual salary / 12) × benefit percentage, capped at $15,000. Premium = (monthly benefit / 100) × adjusted rate, charged monthly and multiplied by 12 for the annual figure. This per-$100 structure is how disability premiums are genuinely built: the group-plan worksheet published by Youngstown State University prices group LTD exactly this way, as a rate per $100 of covered payroll.
Step 2, the base rate. The rate per $100 comes from a table indexed by occupation class, gender and age band. Ages between bands are interpolated in a straight line, so age 40 sits halfway between the 35 and 45 rates. The cheapest and most expensive corners of the table:
| Age | Class 1 (office), male | Class 1 (office), female | Class 4 (hazardous), male | Class 4 (hazardous), female |
|---|---|---|---|---|
| 25 | $0.45 | $0.55 | $1.20 | $1.40 |
| 35 | $0.65 | $0.85 | $1.80 | $2.00 |
| 45 | $1.20 | $1.60 | $3.00 | $3.40 |
| 55 | $2.40 | $2.90 | $5.00 | $5.50 |
| 65 | $4.20 | $4.80 | $8.50 | $9.00 |
Step 3, the adjustment factors. Each policy feature multiplies the base rate: elimination period 1.35 (30 days) down to 0.70 (365 days); benefit period 0.60 (2 years) to 1.05 (to age 67); definition 1.25 own-occupation, 1.00 modified, 0.85 any-occupation; COLA 1.15 simple, 1.30 compound, 1.20 CPI-linked; residual benefit 1.10; smoker 1.20; health 0.90 preferred, 1.00 standard, 1.50 substandard. Multiply them all together and you get the rate printed in your results.
Two ceilings, and one missing check
The tool applies two ceilings honestly and skips a third check entirely, and you should know about all three. The monthly benefit is capped at $15,000, and the maximum monthly benefit line shows 80% of your monthly income (also capped at $15,000), because insurers will not replace so much income that returning to work pays less than staying on claim. What the tool does not check is the benefit percentage itself: the input carries a max attribute of 100 in the markup, but the script only rejects blank, zero or negative values, so typing 150 prices a 150% benefit. That is a preserved behaviour of the published tool, disclosed here rather than quietly rewritten; stay at 80% or below for a realistic design.
Group cover vs an individual policy
Group LTD through an employer is cheaper per dollar of benefit, and individual cover is the one you actually own: the right answer for most people is some of each.
Employer plans typically replace 60% of base salary (bonuses and commissions often excluded), end when you leave the job, and pay taxable benefits when the employer paid the premiums, which can cut the real replacement rate to well under half of take-home pay. The tax treatment is set out in IRS Publication 525, and it is the most common surprise at claim time. An individual policy is portable, pays tax-free benefits when you paid the premiums with after-tax money, and lets you choose the definition, elimination period and riders priced on this page. It also sits alongside, not instead of, public provision: Social Security disability benefits described by the Social Security Administration use a strict any-work standard and a five-month wait, so they are a floor, not a plan.
Two planning links follow from that. Your benefit period should reflect how long a disability could keep you out, which is partly a question of working lifetime, and the average life expectancy calculator gives a rough horizon for that thinking. And disability cover protects income during working life while life cover protects dependants after death; pricing both sides with the insurance life calculator keeps the two budgets in proportion.
What competing calculators miss
Most tools ranking for this keyword price one employer’s group plan or ask you to invent the very rate you came to find:
- Calculator City’s LTD premium calculators: they walk through the per-$100 arithmetic carefully, but you must type in your own premium rate per $100 of coverage. If you already knew your rate, you would not need the calculator. This page supplies the rate from an age, gender and occupation table instead.
- Employer and university cost calculators (the University of Michigan and Washington State PEBB tools are good examples): accurate for their own plan, but each applies a single plan rate to your salary. Your occupation class, definition of disability, riders, smoking and health never enter the price, because the plan has already fixed them.
- Needs-based disability calculators: these estimate how much benefit you should buy from your expenses and existing cover, then stop. They answer “how much” and leave “what will it cost” untouched, which is the question this page answers.
- Quote funnels from insurers and brokers: real prices, but only after your name, email and phone number, and the quote is one company’s rate book presented as the market. An open model with a visible rate table lets you sanity-check any quote against the factors that built it.
- The gap this page fills: a full individual-policy pricing model (twelve inputs, seven adjustment factors, an interpolated rate table) with the adjusted rate per $100 printed in the results, so the estimate can be audited rather than merely believed.
Frequently asked questions
It is the waiting period between the start of your disability and the first benefit check, usually 30 to 365 days. Think of it as a deductible measured in time: a longer elimination period lowers the premium because the insurer starts paying later. In this calculator, moving from a 90-day to a 365-day wait cuts the worked-example premium from $24.38 to $17.06 a month, but it also means funding the first year of a disability from savings or short-term coverage.
Own-occupation pays if you cannot perform the duties of your own job, even if you could do other work. Any-occupation only pays if you cannot work any job you are reasonably qualified for, which is a much harder standard to meet. In this calculator own-occupation carries a 1.25 factor and any-occupation a 0.85 factor, so the same policy costs $24.38 a month with own-occupation wording and $16.58 with any-occupation wording.
Individual policies commonly run 1 to 3 percent of gross income, while group plans are often cheaper, sometimes under 0.5 percent. The worked example here lands at 0.49 percent of salary because it prices a healthy 35-year-old office worker. The same benefit for a 45-year-old woman in heavy manual work comes out at 1.80 percent of salary, inside the usual range, which shows how much age, gender and occupation class move the number.
Individual insurers cap monthly benefits, commonly at $10,000 to $20,000, to limit their exposure on high earners, and this calculator mirrors that practice. At a $360,000 salary, a 60 percent benefit would be $18,000 a month, so the estimate is priced on $15,000 instead. The Maximum monthly benefit line applies a second ceiling, 80 percent of monthly income, also capped at $15,000.
Because the benefit percentage field only rejects blank, zero and negative entries; the code has no upper check on it. Enter 150 percent and the tool prices a benefit of 150 percent of monthly income, still capped at $15,000 a month, and reports a 150.0 percent replacement ratio. Real insurers rarely sell more than 60 to 80 percent replacement, and the Maximum monthly benefit line shows that 80 percent ceiling on every result, so treat anything above it as a pricing exercise rather than a buyable policy.
Yes. Individual LTD is medically underwritten. In this model a smoker pays a 1.20 factor, a substandard health rating carries 1.50, and a preferred rating earns 0.90. In the real market some applicants are declined or offered exclusions instead of a higher price, which no estimator can predict, so treat the health and smoking loadings as averages rather than promises.
No. Group plans are cheaper and usually need no medical exam, but coverage ends when you leave the job, benefits are taxable if your employer paid the premiums, and the definition of disability and the riders are fixed by the plan. Individual policies are portable and customizable but cost more and are medically underwritten. Many people keep the group cover and add a smaller individual policy on top to close the gap.
It is a pricing model, not a quote. The rate table and the adjustment factors are representative of individual LTD pricing, and every result on this page can be checked by hand from the formula shown below, but no insurer publishes its real rate book. Your actual premium depends on the insurer, your state, your medical underwriting and the exact policy wording. Use the estimate to compare policy designs, then get real quotes for the design you pick.
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References
- Social Security Administration. Disability Benefits. Accessed October 22, 2026.
- Social Security Administration. Disability Planner: How You Qualify. Accessed October 22, 2026.
- Social Security Administration. Facts About Social Security Disability Insurance. Accessed October 22, 2026.
- Internal Revenue Service. Publication 525: Taxable and Nontaxable Income (disability benefits). Accessed October 22, 2026.
- National Association of Insurance Commissioners. Disability Income Insurance. Accessed October 22, 2026.
- U.S. Bureau of Labor Statistics, National Compensation Survey. Employee Benefits Survey. Accessed October 22, 2026.
- U.S. Department of Labor, Employee Benefits Security Administration. Health and Retirement Benefits for Consumers. Accessed October 22, 2026.
- The Standard, for the Washington State Health Care Authority. Employee-Paid LTD Premium Calculator (PEBB). Accessed October 22, 2026.
- University of Michigan Human Resources. Expanded Long-Term Disability Monthly Cost Calculator. Accessed October 22, 2026.
- Youngstown State University. Traditional Long Term Disability Premium Calculation (group plan worksheet). Accessed October 22, 2026.