Your most valuable asset isn’t your house, car or retirement account. It’s the ability to make a living.

Disability insurance pays a portion of your income if you can’t work for an extended period because of an illness or injury.

Everybody who relies on a paycheck should have this coverage.

The chance of missing months or years of work because of an injury or illness may seem remote, especially if you’re young and healthy and you work at a desk.

But more than one in four 20-year-olds will experience a disability for 90 days or more before they reach 67, according to the Social Security Administration.

Types of disability insurance

There are two main types of disability insurance — short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap, such as $10,000, during disability. Some long-term policies pay for additional services, such as training to return to the workforce.


Short-Term disability Insurance                                 Long-Term disability Insurance

Typically replaces 60% to 70% of base salary            Typically replaces 40% to 60% of base salary 

Pays out for a few months to one year,                       Benefits end when the disability ends. If the        depending on the policy                                               disability continues, benefits ends after a 

                                                                                           certain number of years or retirement age.

May have a short waiting period, such as two          

weeks, after you become disabled and before         A common waiting period is 90 days after          benefits are paid                                                             disability before benefits are paid