Though the risk of a disability may seem unlikely, about one in four workers will experience a disability lasting longer than 90 days during their working years.1 So it’s important to consider how a disability could impact you, your family and your financial goals.

Disabilities can be caused by an injury or illness and are categorized as either short or long term. Short-term disabilities typically last fewer than six months and include situations you may not associate with disability, like recovery after surgery or injury and pregnancy/birth. Individual short-term disability coverage can be expensive, and many employers don’t offer enough paid time off for these events, creating a potentially significant risk for workers (and their families) who depend on their income.

For this reason, we recommend having a plan to replace 100% of your after-tax income for a period that could last six months. This money can help cover your necessary expenses and any additional medical costs that could arise. Your plan could include self-funding (where you use paid sick leave and emergency savings), short-term group disability benefits or a combination of both.

While a disability that lasts longer than six months is less common, it’s far more financially harmful. Options for protection are typically limited to insurance. As with short-term disability, we recommend trying to replace as much of your after-tax income as possible.

Should I consider long-term disability insurance through my employer?

People usually get disability insurance either through their employer or an individual plan. If you’re relying on group coverage, keep in mind that if you don’t enroll when first eligible, pre-existing conditions could impact your ability to receive coverage in the future. Additionally, it’s important to understand what happens to your benefit should you leave your employer.

Can’t I just rely on workers’ comp or Social Security disability?

While workers’ compensation and the Social Security Disability Insurance (SSDI) program can provide some disability benefits, they are generally limited and must meet strict requirements, which is why we don’t recommend relying solely on them for long-term disability protection.

Based on your personal situation, your financial advisor can develop a plan that will help protect your financial goals should you be faced with a disability.

Important information:

1 Source: Society of Actuaries,