The Personal Need for Disability Insurance
Don’t Rely on Social Security
Group Disability Insurance
Individual Disability Income Insurance
If collective coverage is not accessible, the answer may be individual disability income insurance. Even though individual policies can cost more, as long as you pay the premiums with after-tax dollars, the benefits are tax-free. Plus, an individual policy enables you to adapt its terms to suit your personal needs. When shopping for an individual disability policy, consider the following:
● Company strength: You need to determine and be confident the company is financially robust.
● Definition of disability: Search for a policy that defines disability in the broadest terms achievable. Some policies will allow you to work in a different occupation and still collect incapacity benefits.
● Elimination period: How long must you wait before disability payments commence?
● Benefit period: How long will you need coverage? Both short-term and long-term
disability benefits are an option.
● Inflation protection: Try to find a policy that adjusts benefits according to inflation.
The Consequences of Disability
Individuals with Disabilities by Age4

1Based upon the 1985 Commissioners’ Individual Disability Table.
2Annual Statistical Report on the Social Security Disability Insurance Program, 2021, November 2021. Table 61, Medical decisions at the initial adjudicative level, by year of application and program, all decisions.
3The discussion here concerns federal income tax law only. State or local law may vary.
4Source: U.S. Census Bureau, 2019 American Community Survey 1-Year Estimates, Sex-by-Age-by Disability Status for the civilian non-institutionalized population, male and female. Table B18101.