Group Long Term Disability Insurance Cost: The Real Per-Employee Numbers
It usually costs less than owners assume — often a lot less. In the typical ranges we see, group long-term disability runs about $15–$35 per employee per month. Here's what carriers actually price on, how benefit design moves the number, and how the funding model changes both your bill and the taxes.
Get a Group Quote ↓
How Much Is Long Term Disability Insurance Per Employee?
In the typical ranges we see for 2026, group long-term disability (LTD) runs about $15–$35 per employee per month, and group short-term disability (STD) about $10–$25. Carriers quote group LTD as cents per $100 of covered payroll — usually landing somewhere around 0.25%–0.5% of payroll — so your bill scales with salaries and benefit design, not a flat per-head fee.
This page owns one question: what a group disability insurance policy costs and what moves the number. If you're still sorting out what STD and LTD actually are — elimination periods, benefit durations, how a claim works — start with our group disability insurance guide, then come back for the pricing math.
FreedInsure LLC (NPN: 20230457) is an independent brokerage licensed in 39 states. We run group disability quotes across multiple carriers for companies from 2 to about 200 employees — 100% free, because carriers pay us, and you get the same rates as going direct. Call (844) 788-3733.
Quick answer: In the typical ranges we see for 2026, group long term disability insurance cost runs about $15–$35 per employee per month — roughly 0.25%–0.5% of covered payroll — and group short-term disability about $10–$25. Covered payroll, industry mix, benefit percentage, elimination period, and group size set your exact rate, and who pays the premium changes whether benefit checks get taxed.
What Drives Long Term Disability Insurance Cost for a Group?
Five inputs do most of the work: covered payroll, industry and occupation mix, benefit percentage, elimination period, and group size. Because group LTD is quoted as a rate per $100 of covered payroll, a ten-person software firm and a ten-person roofing crew can see very different bills for the exact same benefit design.
Covered payroll is the base: higher salaries mean a bigger benefit at stake, so a bigger premium. Occupation mix is the risk multiplier — office-heavy groups typically price lower than physical-labor groups. Benefit percentage (LTD typically replaces 50%–60% of pay) and the monthly cap decide how much the carrier is on the hook for. The elimination period — typically 90–180 days for LTD — works like a deductible measured in time: the longer your team can wait for checks to start, the less you pay. And larger groups typically spread risk better and see friendlier unit pricing.
Here's how the common design choices typically move the premium — these are the levers your quote call is really about:
| Design Lever | Budget-Friendly Choice | Richer Choice | How It Moves the Premium |
|---|---|---|---|
| Benefit percentage | 50% of pay | 60% of pay | More income replaced = more premium, roughly step for step |
| LTD elimination period | 180 days | 90 days | Shorter waits mean earlier checks — typically a noticeably higher rate |
| LTD benefit duration | Capped (e.g. 2–5 years) | To age 65 | To-65 protection is the priciest upgrade — and usually the most valuable |
| STD elimination period | 14 days | 0–7 days | Near-day-one coverage triggers more claims, so it costs more |
| Monthly benefit cap | Lower cap (e.g. $5,000) | Higher cap ($10,000+) | Mostly matters — and mostly costs — for higher-paid teams |
| Funding model | 100% voluntary (employee-paid) | 100% employer-paid | Voluntary can take the employer's share of the bill to roughly $0 |
None of these choices is all-or-nothing. A common small-group play in the typical ranges we see: employer-paid LTD with a 90-day elimination period paired with a voluntary STD option — the employer funds the catastrophic protection, employees who want the paycheck bridge buy it at group rates.
How Much Is Short Term Disability — and How Much Does It Pay?
Group short term disability insurance typically costs about $10–$25 per employee per month in the ranges we see, and typically pays about 60% of weekly pay for 3–6 months after a short 0–14 day elimination period. It's priced mainly on three things: the weekly benefit amount, how fast checks start, and how long they last.
STD and LTD solve different problems, which is why they're usually quoted together. STD handles the common, shorter absences — a surgery with recovery time, an injury, a difficult pregnancy — while LTD covers the rare-but-devastating disabilities that stretch past the six-month mark. Groups that buy both typically line up the STD benefit period with the LTD elimination period so the coverage hands off cleanly, with no gap in the paycheck.
If budget forces a choice between the two, that's a real strategic decision — our short-term vs long-term disability breakdown walks through which one earns its premium first for different kinds of teams. The short version: they protect against different risks, and the right first buy depends on your workforce, your sick-leave policy, and your state's rules.
Employer-Paid, Shared, or Voluntary: The Funding Model Moves the Bill
There are three ways to fund a group disability plan, and each one moves two numbers at once: what the employer spends each month, and whether benefit checks get taxed when an employee actually claims. That second effect is the one that surprises almost everyone.
💼 100% Employer-Paid
The employer covers the full premium — generally a tax-deductible business expense — and everyone eligible is typically covered automatically, but benefits are usually taxable income to the employee at claim time.
🤝 Shared Cost
Employer and employees split the premium, trimming the employer's bill while keeping the benefit meaningful — the tax treatment of benefits typically follows the split, so confirm the mechanics with your CPA.
📋 100% Voluntary
Employees who want coverage pay the full premium by payroll deduction, so the employer's cost is roughly $0 — here's how voluntary short-term disability works as an offer-it-free strategy.
⚖️ The Tax Flip
Employer-paid premiums typically mean taxable benefits; employee-paid post-tax premiums typically mean tax-free benefits — our guide on whether short-term disability is taxable shows the math. Confirm with your CPA.
Because premium dollars and tax treatment interact, the cheapest-looking model isn't automatically the best one. A 60%-of-pay benefit that gets taxed can net an employee less at claim time than a leaner benefit paid tax-free — which is exactly the design conversation a broker should walk you through before you sign anything. Call (844) 788-3733 and we'll run the scenarios side by side.
Straight talk: because group disability is priced per $100 of covered payroll, the real number is smaller than it sounds. A 10-person firm typically sees whole-team LTD quotes around $150–$350 per month total in the ranges we see — not per employee. Quoting is free and takes a simple census (ages, salaries, job titles, ZIP). Run your actual number before deciding you can't afford it.
How FreedInsure Helps
FreedInsure compares 14+ group disability carriers simultaneously to find your business the best rate and coverage for your specific team.
🔒 Independent Broker
We represent multiple carriers, not just one. No captive loyalty. Our only goal: best coverage at the lowest price for YOUR situation. If one product is better than another, we tell you honestly.
💰 Always Free
Our service costs you $0. Carriers compensate brokers when you enroll. You get the same plans at the same price as going direct — plus personalized expert guidance, plan comparison, and enrollment assistance.
📞 Real Licensed Advisors
Not a chatbot. Not a call center. Licensed insurance professionals who understand your specific situation. Same advisor handles your case from first call through enrollment. Available by phone, text, and email.
📈 10,000+ Members Enrolled
We've helped over 10,000 members across 39 states. 4.9 Google rating. We know which carriers work best in which ZIP codes, which plans have the strongest networks, and which options most people overlook.
Ready to get started? Call (844) 788-3733 or complete the form below. A licensed advisor will call within 15 minutes with personalized options. No pressure, no spam, no data selling. Just expert guidance that's 100% free.
Frequently Asked Questions
Get Your Free Group Quote
Licensed advisor compares 14+ group disability carriers. Free, no obligation.
Keep Going
What Our Members Say
Protect the Paychecks. We'll Run the Number.
Talk to a group benefits broker. Free group quotes. 14+ carriers compared. (844) 788-3733.
Get a Group Quote →