Your employer may provide group short-term and/or long-term disability insurance that replaces a portion of your income if you’re ill or injured and unable to work. Typically, an employer’s plan will replace up to 60 percent of your salary. You should read the fine print, however. Plans may have a benefit cap, limit how long you can receive benefits, and have a narrow definition of disability.

Need More?

Even if you have coverage through your employer’s group disability policy, you may want to supplement it with an individual policy. Make sure you know how much short-term and long-term disability insurance you have, and what the terms are, before you buy an individual policy. Then determine how much coverage you think you’ll need. You should also carefully consider how optional provisions coordinate with your existing coverage. If coverage through your employer doesn’t account for replacing income earned through bonuses, an individual policy may have more expansive terms.

Save money on premiums

You can extend the elimination or waiting period before you would start receiving benefits. One area in which you may not want to cut costs is own occupation coverage. When you purchase this type of coverage, you’ll generally receive benefits if you can’t perform the major duties of your own occupation. Definitions vary, so check the contract carefully. Riders to consider include coverage until retirement age and cost of living adjustments.