What disability cover does
Disability insurance replaces part of your income if illness or injury stops you from working. It protects mortgage payments and daily expenses when health insurance only pays medical bills.
Policies define disability as own occupation or any occupation, which changes how hard it is to claim.
Short vs long term
Short-term disability often starts within weeks and lasts months, sometimes offered by employers. Long-term disability kicks in after a waiting period and can pay until retirement age.
Emergency savings should bridge the elimination period before long-term benefits begin.
Group vs individual
Employer group plans are cheap but may tax benefits and end when you leave the job. Individual policies cost more but stay with you and can use after-tax dollars for cleaner benefits.
Coverage caps may leave high earners underinsured. Supplement with individual cover to reach sixty to seventy percent income replacement.
Buying tips
Look for non-cancelable and guaranteed renewable wording where available. Cost of living adjustments and future purchase options help as income rises.
Disclose health history fully. Occupation class drives price for manual vs desk jobs.
FAQs
Is workers compensation enough?
Workers comp covers job-related injuries only. Most disabilities come from off-job conditions, so separate disability cover still matters.
Does disability pay mortgage directly?
Benefits usually pay you, and you allocate to mortgage and other bills. Some creditor products pay lenders but are narrower.
Can self-employed people get cover?
Yes, with tax returns and profit history to prove income. Expect stricter underwriting and higher premiums than group plans.
General information only. Not financial, tax, insurance or credit advice.