Long-Term Disability Insurance

Do you ever think about what life would be like if you could no longer earn a living? It happens more than you may realize. Sadly, 25% of Americans will become disabled before retirement age. Are you insured?


You may have a long-term disability insurance policy as part of your benefits package at work. Because disability benefits vary by your policy and what type of disability you have, you’ll want to read the policy carefully.

Be sure that you understand what type of illness or injury is covered. For example, there are two types of disability insurance policies: Own Occupation and Any Occupation. An Own Occupation policy will pay benefits if you are unable to work in the job for which you’ve been trained. Whereas, an Any Occupation policy will only pay benefits if you cannot work in any type of job for which you are reasonably qualified.

Also, policies generally have a waiting period before benefits are paid, so you’ll want to know what to expect.

Check to see what percentage of your wages you’ll receive—usually 60%, but some pay up to 80%—and how long you’d be able to receive benefits. Some policies have a time limit while others pay until retirement age. Keep in mind that long-term disability benefits are generally considered to be taxable income.

Once you fully understand your coverage, you’ll need to make sure that the benefit amount would be enough for you and your family to get by. If not, you may want to consider purchasing an individual policy, too, which follows you if you leave your employer.