What if your last payday was your last payday?

Disability insurance protects against the loss of income due to disability as a result of sickness or accidental injury.  It’s very important to verify what the policy covers.  If your company has a worker’s compensation plan but you injure yourself on the golf course - that is not a covered injury.  The best disability plans cover both sickness and accidents.  But what about health insurance?  That typically just pays for your doctor and hospital bills - it does not supplement your income for time off of work.  Insurance companies generally limit the amount of coverage to replace income, and it is driven by your adjusted gross income calculated on your tax return and also by your occupation.  Short-term disability coverage generally provides coverage for up to two years and is limited to approximately 60% of weekly wages.  Long-term disability coverage can provide benefits for a specific number of years or until a certain age; these plans are limited to approximately 75-80% of weekly wages although most provide 50-60%. 

Talk to your financial planner about what types of coverage you have at work and if it makes sense to supplement that with another policy.