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Develop a Long-Term Plan for Income With Our Disability Income Insurance

If you become sick or injured and cannot work, disability income insurance can help replace a portion of your lost wages. 


Disability Income Insurance

What would you do if you were diagnosed with an illness or experienced a serious accident that left you disabled and unable to work? Hopefully, that will never happen, but having a plan B to fall back on could give you and your family more financial stability in adjusting to a reduction in your household income.  Disability income insurance can offer you that kind of future protection and help with peace of mind.

couple looking at laptop on couch

What Is Disability Income Insurance?

Disability income insurance provides you supplementary income in the unfortunate event that an illness or accident results in your disability, preventing you from working. If you become sick or injured and disabled, you may be able to rely on short-term savings for a little while, but you also will need a dependable long-term plan for income. Social Security disability benefits may provide an additional financial safety net, but you may not start receiving these payments for months. Some disability income insurance policies could start paying you benefits after only 30 days.

Why Do I Need Disability Income Insurance?

Without some form of disability income coverage, people who become temporarily or permanently disabled and unable to work may face the possibility of losing income and being unable to afford their expenses. Disability income insurance can help you continue to receive income even if you are unable to work because of sickness or injury.

Knowing the answers to the following could help you consider your disability income insurance needs:

  • How strongly does your family rely on your income?
  • How long could your family continue to pay expenses from your emergency fund?
  • Do you have enough in your emergency fund to cover all of your expenses?
  • Would you continue to participate in and be covered by your employer's group health plan — or would you eventually need to convert to an individual policy?
  • Would you need to hire someone for tasks you normally complete yourself during a period of disability?
more than 25 percent pie chart

More than 25% of today's 20-year-olds will become disabled before they are old enough to retire.1

43 percent pie chart
43% of people age 40 will experience long-term disability by the age of 65.2

How Does Disability Income Insurance Work?

Most policies are available to people between the ages of 18 and 60. Should you become injured or sick, disability insurance will replace a percentage of your income, often ranging from 40% to 70% of your taxable earnings. A typical policy replaces 60% of your earnings. The higher the portion of your earnings that will be replaced, the more the policy will cost. Policies generally will not pay more than what your income was prior to becoming sick or injured. 

Keep in mind that, like other forms of insurance, disability insurance policies typically come with a period after you buy the policy in which you are not covered. If you become disabled during this time, you won't receive any benefits from the policy .You can choose a waiting period of 30, 60, 90, 180 or 365 days. The longer your waiting period, the less expensive your coverage will be. The longer your benefit period, the more expensive your coverage will be.

There are two main types of disability income insurance: short-term and long-term disability.

Short-Term Disability

These policies can have a waiting period of up to two weeks before benefits kick in. They typically have a maximum period of coverage of up to two years, but the exact length of time will depend on the policy.

Long-Term Disability

These policies have longer waiting periods before the benefits can be used. These can be anywhere from several weeks to several months. Benefits may be paid for a few years or even for life, depending on the terms of the policy. Often, a long-term disability policy starts coverage when a short-term disability policy coverage ends. For example, a policyholder might have a short-term policy that replaces income for six months and a long-term policy that begins coverage six months after the start of a disability.

What Does Disability Income Insurance Cover?

Different long- and short-term disability insurance policies define a disability in different ways. Before purchasing a policy, it's important to understand what it covers. A policy distinguishes between own occupation disability (if you became disabled and unable to perform the majority of occupational duties that you have been trained to perform) and any occupation disability (if you become disabled and unable to work in any job that would be reasonably suited for you based on your education, experience and age). Policies may not cover preexisting conditions. Disability income policies typically cover: 

Various Illnesses & Injuries

Regardless of where these conditions occur depending on the terms of your policy

Recovery Time

Time away from work due to an illness or injury or even after surgery

Accidental Injury

Some policies only cover for this while others also cover you for illnesses

person doing physical therapy

How Much Does Disability Insurance Cost?

The cost of disability insurance premiums varies. Exactly how much a policy's premiums cost can depend on several factors, including:

  • Your age
  • Your sex
  • Your occupation
  • The amount of income you want to insure
  • Preexisting health conditions

If you add features to your policy, such as cost-of-living adjustments, you will likely have to pay more. If you work at a job at which you are less likely to become disabled, such as a desk job, then the cost for disability insurance is typically lower than if you hold a higher-risk job, such as in construction.

Let's Get Started

When it comes to disability income insurance, our team of financial professionals can help you find the right coverage to help you stay financially fit even if you become disabled.
Give us a call 866-832-7714 866-832-7714

Frequently Asked Questions

Do I get disability insurance through work?

Although there is no law requiring it, many workers can get disability insurance through their jobs, often funded by their employers. But sometimes, employer-provided disability insurance plans may be insufficient to meet workers' income needs in the event they become disabled. In those cases, workers may consider purchasing private policies to supplement their coverage.

Also, employer-provided disability insurance is generally not portable. That means, when you leave that job, you will likely lose that coverage. Privately purchased plans are portable and as long as you continue to pay premiums when due, stay with you no matter where you work.

In addition, if disability insurance isn't provided through your job or if you are self-employed, then you may want to purchase a disability income insurance policy.

Are disability insurance benefits taxable income?

Whether disability insurance benefits are subject to taxes depends on how the policy was funded. Any income you receive through an employer-provided disability income policy will be taxed. In some instances, your employer may pay the taxes. If you pay the premiums for disability insurance, then the benefits are typically not taxed.

What's the difference between a noncancelable policy and a guaranteed renewable policy?

Noncancelable policies must be renewed by the insurance company unless the policyholder fails to pay premiums. Insurance companies also are not allowed to increase the cost of the premiums or reduce the amount of benefits on these policies if the insured continues to pay premiums.

Guaranteed renewable policies mean the insured can renew the policy with no change in benefits but may face increased premiums. However, if premiums are raised, they must be increased over entire classes of policyholders and not just on individual policies.

What's the difference between critical illness and disability income insurance?

Critical illness insurance and disability income insurance can both help to provide money when you're dealing with health issues. Whether you stop working temporarily or face high out-of-pocket expenses, these policies might play an important role — but they work differently. Critical illness insurance covers a specific, predefined set of medical conditions. Disability income insurance provides benefits to insureds who are disabled as a result of injury or illness and cannot perform normal work duties.

Why Choose Western & Southern?

As one of the strongest life insurance groups, Western & Southern has a heritage of providing people just like you with exceptional, personalized service.

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1 Social Security Administration
2 Insurance Information Institute

Western & Southern Agency, Inc. is a member of Western & Southern Financial Group (Western & Southern). Some products available are issued by third party insurance companies, which are not affiliated with any Western & Southern member company. Western & Southern Agency, Inc. is the distributor. A contract's financial guarantees are subject to the claims-paying ability of the issuing insurance company. In the State of California, Western & Southern Agency, Inc. is known as and does business as Western-Southern Insurance Agency.