The Unsung Hero: Why Disability Insurance is Your Most Critical Financial Asset

Most people insure their car, their home, and even their life, but they often overlook their single most valuable asset: their ability to earn an income. **Disability insurance** provides a replacement income if you become unable to work due to illness or injury. For many, this is the most essential policy they can own.

Understanding the Two Types

There are two primary forms of **income protection**:

1. Short-Term Disability (STD)

STD typically covers disabilities that last for a shorter period, usually three to six months. It often has a very short waiting period (0-14 days). STD is commonly offered as a group benefit through an employer and replaces a high percentage of your salary (e.g., 60-80%).

2. Long-Term Disability (LTD)

LTD covers serious conditions that keep you out of work for many months or even years, often until retirement age. LTD has a much longer waiting period (e.g., 90 or 180 days) and typically replaces 50-70% of your income. This is the crucial coverage for preventing financial ruin.

The Definition of “Disability” is Key

When shopping for a personal policy, pay close attention to the definition of disability:

• Own Occupation: Pays benefits if you cannot perform the duties of your specific job. **(Stronger, more expensive)**
• Any Occupation: Pays benefits only if you cannot perform the duties of *any* job for which you are reasonably suited by education, training, or experience. **(Weaker, cheaper)**

Why It Matters More Than Life Insurance

Statistically, you are far more likely to become disabled during your working career than you are to die prematurely. If you become disabled, the financial impact is twofold: your income stops, and your medical expenses rise. Protecting your paycheck with robust **disability insurance** is the bedrock of a sound financial plan.