Part of our guide: Disability Income Insurance: Solutions, Tools and Guides →
Few things stall a disability sale faster than a premium the client didn’t expect. The good news is that DI is highly adjustable, and a well-designed plan rarely needs to be expensive.
Key takeaways
- A common guideline is to keep disability premiums at or below about 3% of annual income.
- Adjusting the benefit amount, elimination period, and benefit period can lower cost significantly.
- Blending base coverage with a Social Insurance Substitute (SIS) rider provides protection at a lower premium.
Keep the premium near 3% of income or less. Above that, clients hesitate — and policies they do buy are more likely to lapse.
The 3% guideline
When premiums go much above about 3% of annual income, clients are more likely to balk, and if they buy anyway, more likely to lapse. That leaves them unprotected and you without renewals.
Ways to bring the premium down
- Right-size the benefit to essential expenses such as housing, utilities, and groceries. See the M.U.G. plan.
- Lengthen the elimination period. Most fully underwritten policies use 90 days; clients with savings may choose 180.
- Blend base and SIS coverage. A Social Insurance Substitute rider pays when Social Security or other social insurance doesn’t, and its lower cost reduces the total premium.
- Consider a shorter benefit period. Many disability claims resolve within a few years, so a five-year benefit period can offer strong value.
- Choose riders carefully. Include those that truly serve the client, not every option available.
Get help designing the plan
We can run several designs side by side so the client can choose the balance of cost and coverage. For clients who dislike paying for coverage they may not use, see return of premium.
Frequently asked questions
How much should disability insurance cost?
A common guideline is about 1–3% of annual income, depending on age, occupation, and design.
How can I lower my disability insurance premium?
Choose a longer elimination period, a shorter benefit period, a smaller benefit, fewer riders, or a blend of base and SIS coverage.
What is a Social Insurance Substitute rider?
A rider that pays when the insured isn’t receiving Social Security or similar benefits, costing less than equivalent base coverage.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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