How Much Does Disability Insurance Cover?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   In generally terms and with reinsurance limitations, non deductible disability insurance covers up to 60% of your compensation and can generate tax free benefits after the elimination period is satisfied. Deductible disability insurance can cover up to 80% of your compensation, but benefits paid are taxed as ordinary income.

   Answered on July 27, 2013

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   Kelly Moser

   Social Media Strategist, Disability Insurance Services, California

   As Steve mentioned, a private disability insurance policy will cover about 60% of one's income, and will provide the insured with TAX-free benefits.  Don't make the mistake of thinking that the disability insurance offered through your employer will offer you the same amount of coverage.  While the policy may say it offers up to 60%, there is typically a cap on the coverage, AND it's taxable, leaving you with about 42% of your income--not 60%.

   Answered on January 8, 2014

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   CJ Bowker

   Aclaro Risk Management,

   Long term disability insurance typically covers 60-70% of your income. You can also cover your retirement contributions in addition to the amount above. Also, if you are a business owner and/or self employed you may qualify for slightly more than the 60-70% mentioned above but that is on a case by case basis.

   Answered on September 13, 2014

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