The odds of becoming disabled during your working years are far higher than most people realize: a 35-year-old has a 50% chance of a 90+ day disability before age 65. Disability insurance is the most commonly missing piece of American financial plans.
The exposure most people don't know they have
- 3-in-10 workers will experience disability lasting 90+ days during their working years (Social Security Administration)
- Average long-term disability claim: 31.6 months
- Most common causes: musculoskeletal disorders, cancer, mental health — not accidents
What employer disability plans typically cover (and their limits)
| Short-term disability (STD) | Long-term disability (LTD) | |
|---|---|---|
| Waiting period | 0–14 days | 90–180 days |
| Benefit period | 3–6 months | 2 years to age 65 |
| Benefit amount | 60–70% of salary | 50–60% of salary |
| Tax status if employer pays premium | Taxable benefit | Taxable benefit |
Own-occupation vs any-occupation: the critical distinction
Own-occupation: Pays if you can't perform the duties of YOUR specific occupation. A surgeon with a hand injury who can't operate but could work a desk job still receives benefits.
Any-occupation: Pays only if you can't work in ANY occupation. Much harder to qualify. Most group employer plans switch from own-occupation to any-occupation after 2 years.
When to buy individual disability policy
- You have high income that would be significantly disrupted by disability
- Your employer plan caps at 60% of salary (you want 70–80%)
- Your employer's plan uses any-occupation definition after 2 years
- You're self-employed with no group plan at all
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