Understanding how disability insurance is rated, and what will cause you to pay more, is crucial when selecting a policy. Insurers evaluate several factors to determine premium costs and eligibility for coverage.

1. Occupation: High-risk jobs, such as those in construction or emergency services, typically have higher rates due to the increased likelihood of injury. Conversely, office jobs may attract lower premiums.  This area significantly affects your premium.
2. Health Status: Insurance companies will dig through your health history and look at your current health status. Applicants may be required to undergo medical examinations or provide health documentation and pre-existing conditions can impact both eligibility and premium rates.
3. Age: The younger you are, the less you will pay, statistically. As you age, premiums usually increase to reflect the higher risk of health issues.
4. Coverage Amount and Duration: This is where you start to be able to control the cost.  The coverage amount (i.e. the percentage of income that you want to replace), and the duration (how long the payments will last), drastically affect the premium payments.  You can adjust both.
5. Elimination Period: This is the time you must wait before benefits begin. Policies with shorter elimination periods often have higher premiums. Choosing a longer elimination period can reduce your costs, but it may require you to rely on savings or other resources during that time.
6. Lifestyle: Factors like smoking, alcohol use, and participation in risky hobbies (like skydiving or extreme sports) can affect your rating. Insurers often consider these lifestyle choices when determining your premium.  Sometimes policies will include a clause that say ‘if you are injured while participating in one of these risky activities, we won’t pay.’  This is a common clause used to reduce potential liability on the insurance company while also lowering your premiums.