Long-term disability insurance
Disability insurance can replace part of your income, but is that enough to protect your family's future?
Explore how assumed disability benefits could affect your family's financial goals.
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Important Information About This Illustration
Assumes coverage for your existing occupation, with eligible benefits continuing through age 66 and ending in the year you turn 67, provided you remain disabled. Benefits are evaluated against your family’s projected financial needs. Wealth Coach is not an insurance broker.
Wealth Coach models the potential financial impact of long-term disability insurance covering your existing occupation, with benefits assumed to continue through age 66 and end in the year you turn 67, provided you remain disabled.
The illustration assumes that the disability qualifies for benefits under the policy and that the insured remains eligible for benefits throughout the modeled payment period.
The projected benefits are evaluated against your family’s future financial needs based on the information and assumptions you provide.
Actual disability coverage, eligibility, exclusions, waiting periods, benefit duration, and payments depend on the terms of an individual policy.
Wealth Coach is a financial planning tool, not a licensed insurance broker or insurance company. We do not sell, issue, or underwrite insurance policies.
These illustrations are for financial planning purposes only and do not constitute an insurance quote, coverage recommendation, or guarantee of benefits.
Employer-sponsored disability benefits can provide important protection. But having disability insurance doesn’t necessarily mean you have long-term coverage, or that your benefits will replace as much income as you expect.
37%
You may have short-term disability insurance without having long-term coverage. Short-term and long-term disability insurance are different benefits. Having one does not guarantee you have the other.
Source: U.S. Bureau of Labor Statistics (2026)$8,273/month
Your policy may advertise income replacement of 60%, but a monthly maximum could significantly reduce what you actually receive. This can be particularly important for higher-income households.
Source: Mployer Insights (2026)90 Days
In Mployer’s 2026 study, 68% of surveyed LTD plans had a 90-day elimination period, while another 23% had a 180-day period. Short-term disability benefits, paid leave, or other resources may help bridge the waiting period.
Source: Mployer Insights (2026)That may be what your policy says. But the monthly benefit cap can tell a different story.
Imagine you earn $250,000 per year.
Your employer provides long-term disability insurance that replaces 60% of your income, subject to an $8,273 monthly maximum.
60%
Expected
40%
Approximately, effective
You thought you had 60% income protection. The monthly cap reduces it to approximately 40%.
That’s a potential difference of more than $50,000 per year.
And it doesn’t account for the waiting period before long-term disability benefits begin.
This is an illustrative example using the reported median monthly benefit cap. Actual benefits depend on policy terms, covered earnings, eligibility, offsets, and other factors.
Short-term disability typically provides benefits for a limited period. Long-term disability is designed to provide income replacement for longer-lasting disabilities. Having short-term coverage does not automatically mean you have long-term coverage.
Check both the percentage of income your policy replaces and the maximum monthly benefit. A monthly cap can significantly reduce the effective replacement percentage.
Check the policy’s elimination period. Also determine whether short-term disability, paid leave, savings, or other income could cover your expenses during that period.
Review your employer’s benefits summary or contact your HR or benefits department.
Look for:
Your income supports the life you’re building.
Your mortgage. Your children’s education. Your retirement. Your savings.
If your income changes unexpectedly, those goals could be affected.
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Disability insurance coverage varies by employer and policy. Benefits may be subject to eligibility requirements, waiting periods, maximum benefit limits, exclusions, offsets, and other conditions. The statistics and examples presented are for general educational purposes and may not reflect your individual coverage. Review your policy documents or contact your benefits administrator for details. Wealth Coach does not determine insurance coverage or eligibility.
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