Disability Insurance• 2026-06-08• 6 min read
Disability Insurance: What Does It Really Cover?
A lingering illness or unexpected injury can pause your earning ability for months or years. Disability insurance acts as a paycheck protection plan, replacing 50% to 70% of your pre-tax income while you are unable to work.
Short-Term vs. Long-Term Disability
• Short-Term Disability (STD): Replaces income for a brief period (typically 3 to 6 months) following a brief elimination period (e.g., 7 or 14 days).
• Long-Term Disability (LTD): Takes over after short-term benefits end (or after a 90/180-day elimination period) and can pay monthly benefits for 2 years, 5 years, 10 years, or until retirement age (65/67).
Why 'Own Occupation' Definitions Matter
The definition of disability determines when benefits pay out. An 'Own Occupation' policy pays benefits if you are unable to perform the material duties of your specific profession — even if you could work in another field. This definition is crucial for specialized professionals, physicians, attorneys, and skilled business owners.
Summary & Next Steps
Relying solely on group disability through an employer may leave gaps due to benefit caps or taxability. An individual policy provides portable, personalized protection.