The chance of missing months or years of work because of an injury or illness may seem remote, especially if you’re young and healthy and you work at a desk.
But more than one in four 20-year-olds will experience a disability for 90 days or more before they reach 67, according to the Social Security Administration.
Short-term disability insurance
- Typically replaces 60% to 70% of base salary.
- Pays out for a few months to one year, depending on the policy.
- May have a short waiting period, such as two weeks, after you become disabled and before benefits are paid.
Long-term disability insurance
- Typically replaces 40% to 60% of base salary.
- Benefits end when the disability ends.
- If the disability continues, benefits end after a certain number of years or at retirement age.
A common waiting period is 90 days after disability before benefits are paid
Consider buying a policy if you don’t have any or enough disability coverage at work or are self-employed. Employer-sponsored disability insurance usually pays only a portion of your base salary, up to a cap. It’s a great idea to supplement that coverage if your salary far exceeds the cap or you depend on bonuses or commissions.
Contact us for a free consultation!
