Disability Insurance
Protecting Your Income If You Can’t Work
Your ability to earn an income is one of your most valuable financial assets. Disability insurance helps protect it if you become sick or injured and can’t work.
There are two primary types of coverage: Individual Disability Insurance (IDI) and Employer Group Disability Insurance.
What Is Individual Disability Insurance (IDI)?
Individual Disability Insurance is a policy you personally own. It replaces a portion of your income (typically 40–70%) if you’re unable to work due to illness or injury, subject to policy terms.
How It Works
- You apply individually and complete medical underwriting
- You choose your coverage amount, waiting period, and benefit duration
- You pay the premiums directly
- If you become disabled and are approved, you receive monthly income benefits
Why People Choose IDI
- Portable — You keep it even if you change jobs
- Customizable — Tailor benefit levels and riders
- Own-Occupation Options — Pays if you can’t perform your specific profession
- Potential Tax Advantage — If you pay premiums with after-tax dollars, benefits are generally tax-free
This type of coverage is especially valuable for self-employed professionals, business owners, and high-income earners with specialized skills.
What Is Employer Group Disability Insurance?
This coverage is offered through your workplace as a benefit.
Most plans include:
- Short-Term Disability (STD) — Covers the first few months of disability
- Long-Term Disability (LTD) — Begins after STD and may continue for several years
Why Group Coverage Helps
- Often no medical underwriting
- Lower cost — employer may pay some or all of the premium
- Easy enrollment through benefits package
However, group coverage typically:
- Ends if you leave your job
- Offers standardized (non-customizable) benefits
- May shift to an “any occupation” definition after a period of time
- May produce taxable benefits if your employer pays the premiums
Key Differences at a Glance
Ownership
IDI is yours. Group coverage belongs to your employer.
Portability
IDI follows you. Group coverage usually ends when employment ends.
Customization
IDI is tailored to you. Group coverage is standardized.
Definition of Disability
IDI often offers own-occupation protection. Group plans may require you to be unable to work in any occupation after a certain time.
Taxes
After-tax IDI premiums generally mean tax-free benefits. Employer-paid coverage may result in taxable benefits.
What Many Professionals Do
If group coverage is available, many advisors recommend keeping it — but also considering an individual policy to:
- Fill income gaps
- Secure own-occupation protection
- Maintain coverage through job changes
- Increase total benefit amounts
Layering both types of coverage often provides the strongest income protection.
Why This Matters
An injury or illness doesn’t just impact your health — it can disrupt your income, retirement savings, and long-term financial goals.
Disability insurance isn’t about expecting the worst.
It’s about protecting what you’ve built.
Ready to Protect Your Income?
Your coverage should match your career, income level, and long-term goals. Let’s review your current benefits and determine whether you have gaps — and how to strengthen your protection.