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. What you pay for it depends on far more than your salary: your age, occupation class, how long you wait before benefits start (the elimination period), how long benefits last, the definition of disability, and optional riders all move the premium up or down.
This calculator estimates an individual LTD premium from those real underwriting factors. Enter your details below, then compare scenarios to see exactly which choices drive your cost.
Estimate your monthly and annual long-term disability premium. All fields with an asterisk are required.
Worked example
A 35-year-old man works an office job, earns $60,000 a year, and wants a policy replacing 60% of his income with a 90-day elimination period, benefits to age 65, and an own-occupation definition, with no riders, as a non-smoker with standard health:
- 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 male office worker: $0.65 per $100 of monthly benefit
- Own-occupation definition factor: 1.25, so the adjusted rate is $0.65 × 1.25 = $0.81 per $100
- Monthly premium: ($3,000 ÷ 100) × $0.81 = $24.38
- Annual premium: $24.38 × 12 = $292.50, or 0.49% of salary
- Ten-year total: $2,925.00
Every figure above was produced by this calculator from the inputs shown, so you can re-enter them and confirm.
How your choices change the premium
Using the same 35-year-old office worker as a baseline (monthly premium $24.38), changing one factor at a time produces:
| Change | Monthly premium | Annual premium |
|---|---|---|
| Baseline: 90-day elimination, own-occupation, to age 65 | $24.38 | $292.50 |
| Shorten elimination to 30 days | $32.91 | $394.88 |
| Lengthen elimination to 365 days | $17.06 | $204.75 |
| Benefit period of 2 years instead of to age 65 | $14.63 | $175.50 |
| Any-occupation instead of own-occupation | $16.58 | $198.90 |
| Smoker instead of non-smoker | $29.25 | $351.00 |
| Same policy, 45-year-old woman in heavy manual work | $90.00 | $1,080.00 |
The elimination period is the single biggest lever most buyers control: a year-long wait cuts the premium by roughly 30% versus a 90-day wait, but it means funding the first year of a disability yourself.
How the premium is calculated
The estimate follows the way individual disability insurers price coverage:
Premium = (Monthly benefit ÷ 100) × Adjusted rate per $100
- Monthly benefit = (annual salary ÷ 12) × benefit %, capped at $15,000 per month. Insurers rarely insure more than about 60–80% of income because fully replacing pay would remove the incentive to return to work.
- Base rate comes from an age-and-gender table for your occupation class, with rates interpolated between five-year age bands. Manual and hazardous occupations cost more because claims are more frequent.
- Adjustment factors are multiplied together for your elimination period, benefit period, disability definition, COLA rider, residual benefit, smoking status, and health rating.
What other LTD calculators miss
Most free LTD tools online are built for a single employer's group plan. They ask for your age and salary, then apply one rate table (for example, a flat factor like 0.0039 of monthly earnings). That is fine for that employer's plan, but it tells you nothing about individual coverage and ignores the factors that actually separate a cheap quote from an expensive one:
- Occupation class. A desk worker and a roofer face different disability risks; group-plan calculators price them identically.
- Definition of disability. Own-occupation policies cost roughly 25% more than any-occupation ones here, and the cheaper definition is also much harder to collect on.
- Elimination and benefit periods. A 30-day wait versus a 365-day wait changes the premium by a factor of almost two in this model; employer tools do not let you test the trade-off.
- Riders and health factors. COLA riders, residual (partial-disability) benefits, smoking status, and health rating are standard individual-policy pricing inputs that group calculators omit entirely.
This calculator includes all of them, and shows your rate per $100 of coverage so you can sanity-check it against any insurer's quote.
Related calculators
If you are pricing income protection, you may also want to size the benefit itself with our Disability Amount Calculator, compare VA disability payments with the VA Disability Calculator, see how salary growth affects what you are protecting with the Salary Raise Calculator, or factor life expectancy into your coverage horizon with the Average Life Expectancy Calculator.
Frequently asked questions
What is the elimination period in LTD insurance?
It is the waiting period between the start of your disability and the first benefit check, usually 30 to 365 days. You can think of it as the deductible measured in time: a longer elimination period lowers the premium because the insurer starts paying later. Short-term disability coverage or an emergency fund typically bridges the gap.
What is the difference between own-occupation and any-occupation?
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. In this calculator, own-occupation costs about 25% more, reflecting the real pricing spread insurers use.
What percentage of income does LTD insurance usually cost?
Individual policies commonly run 1–3% of gross income; group plans are often cheaper, sometimes under 0.5%. Our worked example came out at 0.49% of salary, while a 45-year-old woman in heavy manual work with the same benefit paid 1.80%, which shows how much age, gender, and occupation move the number.
Why is there a $15,000 monthly benefit cap?
Individual insurers cap monthly benefits (commonly $10,000–$20,000) to limit their exposure on high earners. The calculator mirrors that practice so a very high salary does not produce an unrealistic benefit figure.
Can an insurer decline me or charge more because of health or smoking?
Yes. Individual LTD is medically underwritten: smokers and applicants with health conditions pay more, and some applicants are declined or offered exclusions. That is why the calculator includes smoking status and a health rating (preferred, standard, substandard).
Is employer group LTD the same as individual LTD?
No. Group plans are cheaper and usually require no medical exam, but benefits are taxable if your employer pays the premium, coverage ends when you leave the job, and you cannot customize the definition of disability or riders. Individual policies are portable and customizable but cost more.
Sources
- Washington State Health Care Authority – Long-term disability insurance premiums: shows how real group LTD premiums are built from age bands, coverage level, and monthly earnings, which this calculator extends with individual underwriting factors.
Disclaimer: This calculator produces estimates for education and comparison only. It is not an insurance quote, and actual premiums vary by insurer, state regulations, medical underwriting, and policy details. Consult a licensed insurance agent or broker before buying coverage.