Disability Income Insurance

Based on the information you provided, the amount of income shortfall you might experience during a long-term disability is shown below.

Long-term disability (LTD) benefits are taxable when the employer pays the premiums, reducing an already limited benefit. In addition, employer provided LTD, even if employee paid, may not be portable. Disability income insurance coverage is generally limited to 60 percent to 70 percent of salary and typically has a monthly cap. Income may not be fully covered due to the cap. Bonuses are not counted as covered income by most LTD policies.

Income may be available from the following sources, but only for a limited time:

• Accumulated sick-pay benefits.
• Salary continuation benefits.
• Short-term disability benefits (typically one year or less, limited amount).

This chart shows the percentage of your monthly expenses that you may need to replace in the event of a long-term disability. A disability income insurance policy is one tool you may want to consider to help you address this potential shortfall. Social Security pays disability benefits, but you must be considered totally disabled, and it can be difficult to qualify for benefits.

Total Monthly Expenses