Employer coverage isn't enough
Group LTD typically pays 60% of base salary — but it's taxable (the employer pays premiums), often capped at $5–10K/month, excludes bonuses, and vanishes when you change jobs. A supplemental individual policy fills the gap and follows you. High earners with big bonus components are the most exposed.
- • Own-occupation rider is non-negotiable for surgeons, dentists, and specialists.
- • Residual disability pays partial benefits for partial income loss — the most-claimed rider.
- • Buy young: rates lock at purchase age and health.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much does disability insurance cost?
Individual long-term disability runs 1–3% of annual income. A healthy 35-year-old office worker earning $100K pays roughly $1,500–2,000/year ($125–170/month) for a $5,000/month benefit to age 65 with a 90-day elimination period.
Short-term vs long-term disability?
Short-term covers 3–6 months after a brief wait — an emergency fund can self-insure that. Long-term is the real risk: a multi-year or career-ending disability. Prioritize LTDI with an elimination period your savings can bridge.
Is disability insurance worth it if I'm young and healthy?
That's exactly when to buy. Premiums lock at your purchase age, and health conditions (back issues, mental health, autoimmune) can make you uninsurable later. Disabilities are more often illness than accident — nobody schedules them.
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