Short & Long Term Disability
Disability insurance pays a portion of your income if you can’t work for an extended period because of an illness or injury. Your most valuable asset isn’t your house, car or retirement account. It’s the ability to make a living. There are two main types of short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap, such as $10,000 a month. Some long-term policies pay for additional services, such as training to return to the workforce. Disability policies vary in how they define “disabled.” Some policies pay out only if you can’t work any job for which you’re qualified. Others pay out if you can’t perform a job in your occupation. Some policies cover partial disability, which means they pay a portion of the benefit if you can work part time. Others pay only if you can’t work at all. Consider buying a policy if you don’t have any or enough disability coverage at work or are self-employed. Employer-sponsored insurance usually pays only a portion of your base salary, up to a cap. It’s a good idea to supplement that coverage if your salary far exceeds the cap or you depend on bonuses or commissions.