Disability Insurance: The Most Overlooked Benefit You Might Desperately Need

It’s easy to fall into the trap of believing, “That won’t happen to me.” But here’s the truth: you’re far more likely to experience a serious illness or injury that prevents you from working, than to die unexpectedly before retirement.

Think about this;  If you die, your obligations end.  If you are sick or seriously injured, not only do your obligations persist – you will likely encounter more financial obligations as a result of the illness or injury.  It is far worse (financially) to be alive and unable to work than it is to die.

That’s where disability insurance comes in—and it might be the most important benefit you didn’t know you needed.

What Is Disability Insurance?

Disability insurance replaces a portion of your income if you’re unable to work due to illness or injury. There are two main types of disability insurance:

• Short-Term Disability: Covers you for a few weeks or months.
• Long-Term Disability: Kicks in after STD runs out and can last for years.

Typically, a disability policy will pay you a specified percentage of your current income for a period of time that you cannot work.  For example, let’s say you have a short-term disability policy that covers 60% of your gross salary for three months.  If you make $1,000 per week, the policy will pay you $600 per week for up to three months.

Similar to life insurance, you may have options to purchase higher or lower coverage amounts for corresponding higher or lower premium amounts. 

Why Employers Offer It.

Good employers want to make sure you and your family are protected and prepared for unfortunate circumstances.  They also have an interest in protecting their assets (you), so that you can return to work and continue being a productive employee. 

Your employer may cover part or all of your disability premiums—or offer you the chance to buy affordable group coverage. It’s a cost-effective way to safeguard your income and avoid a financial spiral during hard times.

Preston’s Practical Advice.

If you only choose one type of disability coverage, make it long-term.  It’s the one most people skip—and regret it later.

Think of it this way:

• If you break your leg, short-term coverage helps while you recover.
• But if you’re diagnosed with a serious illness or suffer a life-altering injury, long-term disability can be the difference between financial survival and financial ruin.

Even a modest LTD policy that replaces 50-60% of your income can protect your ability to pay bills, stay in your home, and avoid debt while you recover.

Real-Life Impact.

Without income, your savings can vanish fast—and if you have debts or dependents, the stakes are even higher. Disability insurance offers critical protection for your financial life, mental health, and peace of mind.

Final Thought.

You insure your car, your phone, and your home. Isn’t your paycheck worth protecting too?

At Dealing With Debt, we know that financial stability is about more than budgeting—it’s about planning for the unexpected. We’re here to help you build resilience, reduce stress, and protect your future—one paycheck, one plan, and one budget at a time.

Next Up: “Voluntary Benefits: What Are They, and Are They Worth It?”