Disability insurance is the cornerstone of your disability income planning.

According to the Bureau of Labor Statistics, almost 50% of employees in private industry don’t have access to employer-paid disability coverage. However, many companies offer individual disability plans through payroll deduction to help the employee apply for and receive disability insurance at work.¹ If your company doesn’t offer disability insurance, you can set up your own coverage in various ways. Here are steps you can take to find the best plan.

Talk to your employer about disability insurance.

Meet with your HR department and ask whether they offer disability insurance. Here are some initial questions to ask:

1. If they offer disability insurance, is it employer-paid, employee-paid, or a combination of the two? The general rule is that if your employer pays some or all of the premium, then some or all of any benefits you collect will be taxable to you. Your employer may offer a voluntary plan where you will need to pay the entire premium. However, it grants you access to better rates, along with guarantee issue opportunities — and any benefits you collect will not be taxed. Ask how much it costs and how you can sign up for it.
2. What is the policy’s benefit amount? It won’t be your full salary, as your employer wants some incentive for you to return to the job. Policies generally range from 40 to 70 percent of your salary.
3. How long will my payments last? A policy will indicate the maximum length of time that benefits will last. Long-term disability insurance may cover anywhere between two years through retirement age.
4. When will payments begin? This will depend on whether it’s short-term or long-term disability insurance. Both types of coverage include waiting periods. A waiting period is the time between when you leave work to have your baby or you are diagnosed with a condition that prevents you from working and when payments begin.
5. What is the policy’s definition of disability? The definition of disability varies among policies and carriers. Some consider it related to you not being able to perform the duties of your specific job, while others consider your training and experience. You may carry a policy that pays you if you can’t perform your “own job,” “own occupation,” or “any occupation” that reasonably matches your knowledge, training, and experience.
6. If you don’t have access to disability insurance at work: Ask why not. You could ask whether they would consider starting a voluntary policy for employees.