Is Employer-provided Disability Insurance Enough?

Disability insurance is a crucial part of protecting your income if you’re unable to work due to illness or injury. Many employers offer disability insurance as part of their benefits package, but is this coverage enough to safeguard your financial well-being? The team at Reinholdt & O'Harra Insurance helps clients understand the ins and outs of employer-provided disability insurance and when it may be wise to consider supplemental coverage.

Understanding Employer-provided Disability Insurance

Employer-provided disability insurance typically comes in two forms: short-term and long-term disability. Short-term disability may cover a portion of your income for a few weeks or months, while long-term disability can extend benefits for several years or until retirement age. While these benefits offer valuable protection, they typically replace only a portion of your regular income, commonly ranging from 40% to 60%.

Limitations of Employer Plans

It’s important to recognize the potential gaps in employer-provided disability insurance, such as the following:

• Limited benefit amounts that may not cover all your monthly expenses
• Coverage that ends if you leave your job or change employers
• Waiting periods before benefits begin
• Exclusions for certain preexisting conditions or types of disabilities

For many working professionals, these limitations can leave them financially vulnerable if a disability occurs.

When Supplemental Disability Insurance Makes Sense

Supplemental disability insurance can help bridge the gap left by employer plans. This type of coverage is purchased individually and can:

• Increase your income replacement percentage
• Provide coverage if you change jobs or become self-employed
• Offer more flexibility in benefit duration and waiting periods

Contact us today to discuss your disability insurance options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.