Question 1

How much disability insurance do I need?

Accepted Answer

Most financial planners recommend replacing 60% to 80% of your gross income through disability insurance. Start with your essential monthly expenses, then factor in any existing employer coverage, Social Security Disability Insurance (SSDI), and other income sources. The gap between what you need and what you already have is the amount of individual disability insurance to buy.

Question 2

What is the difference between short-term and long-term disability insurance?

Accepted Answer

Short-term disability (STD) insurance typically covers 60% to 70% of your salary for 3 to 6 months after you become unable to work. Long-term disability (LTD) insurance kicks in after the short-term benefit ends and can last for years or until retirement age. Many employers offer short-term coverage but not long-term, which is where an individual policy may be needed.

Question 3

Does Social Security provide disability benefits?

Accepted Answer

Social Security Disability Insurance (SSDI) provides monthly benefits if you have a qualifying disability and sufficient work history. However, SSDI has strict eligibility requirements — approval rates for initial applications are around 30%. The average monthly SSDI benefit is roughly $1,500, which may not cover all your expenses. Private disability insurance can fill the gap.

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