Disability Insurance protects your most valuable asset during your working years, which is your ability to earn a living.
During the time you are unable to work due to a qualifying disability (illness or injury), the disability insurance replaces your regular income through a monthly benefit in order to maintain your pre-disability lifestyle. Workplaces often provide standard short-term disability (STD) and long-term disability (LTD) insurance to meet federal guidelines. Individual disability income insurance can be customized to meet your needs and considers your occupation, age, income and other factors to determine your cost and monthly benefit payment amount.
Self-employed individuals and employees not offered disability insurance through their employer can purchase their own policies.
Those who have disability insurance through their workplace may wish to consider a “wrap around” disability policy to supplement their employer-provided coverage.
Short Term Disability generally allows for income payments to begin after about a two-week waiting period and will continue to pay until the individual recovers or maxes out the benefits–usually anywhere between one month to two years, depending on the policy.
Long Term Disability generally allows for income payments to begin after about a 90-day waiting period. The waiting period could be longer depending on the policy, however it will continue to pay far longer than STD–for a few years, up to age 65, or even for life.