Disability Insurance

Disability insurance is a form of insurance that insures your earned income against the risk of being unable to perform your work or earn money due to a disability. Your ability to earn income is your greatest asset and is crucial to your financial plan. To meet your immediate or future needs, you must be able to work to earn that income or plan against the risk of unable to earn.

Without disability insurance, the time you’ll spend recovering from your disability could be stressful and difficult, as you try to find funds to cover the time you’ll miss and take care of your family. With a disability policy, you minimize any stress and discomfort you would have to face, which lets you focus on your recovery.

Disability insurance could be in long-term or short-term.

• Long term disability (LTD) insurance has a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life and the monthly benefit is up to 60% of your gross monthly income.
• However, short-term disability (STD) insurance has a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years. Short-term disability insurance replaces a portion of your paycheck — up to 80% of your pre-tax income.