Health and Wellness

Why You Need Disability Insurance

I have disability insurance at work. Is there any reason why I'd need to buy a policy on my own?

Perhaps. Having disability insurance at work is a great start. The policy can help if you get sick or injured and are unable to work. But your employer's coverage might not provide enough money to pay all of your bills.

Employers' disability insurance policies generally cover only 60% of your salary and cap monthly benefits at $5,000 to $10,000 -- up to $60,000 to $120,000 per year before taxes -- even if that is much less than 60% of your base income. And that 60% of income rarely includes commissions and bonuses, leaving many salespeople, stockbrokers and top executives with a lot less money than they're used to living on.

Find out exactly how much your employer's disability insurance policy would pay if you became disabled. If you wouldn't get enough to cover your monthly bills, then it's a good idea to get an individual policy to fill the gaps. You might want to start your search, though, by asking if your employer offers extra coverage if you pay it for yourself.

An individual disability policy can increase your coverage, and you can keep it even after you leave that job. And if you pay the premiums on your own, then the benefits will not be taxed -- unlike disability insurance benefits from an employer-paid policy, which are generally taxable.

When shopping for your own disability insurance policy, look carefully at the definition of disability. This is the key phrase that determines under what circumstances the policy will pay. This definition can vary enormously. Some disability insurance policies will pay if you can't do your current job, even if you can do another job (called an "own-occupation" policy). Some will pay some benefits if you can't earn as much money as you could before the disability. And others will only pay if you can't do any job at all. If you have a highly specialized career -- such as a surgeon -- then it may be worthwhile to pay extra for an own-occupation policy.

Also check out the length of the benefits. Some pay for a few years, others until age 65, and a few will pay for your lifetime, which may be more coverage than you need if you already have a lot of retirement savings. Find out how the benefits will rise with inflation. And see if the policy offers "residual benefits," which will provide some payment if you become partially disabled and have to cut back on your hours.

Author: Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance

© All contents copyright The Kiplinger Washington Editors.

SunTrust Bank and its affiliates and the directors, officers, employees and agents of SunTrust Bank and its affiliates (collectively, “SunTrust”) are not permitted to give legal or tax advice.  While SunTrust can assist clients in the areas of estate and financial planning, only an attorney can draft legal documents, provide legal services and give legal advice.  Clients of SunTrust should consult with their legal and tax advisors prior to entering into any financial transaction or estate plan.  Because it cannot provide legal services or give legal advice, SunTrust’s services or advice relating to “estate planning” or “wealth transfer planning” are limited to (i) financial planning, multi-generational wealth planning, investment strategy, (ii) management of trust assets, investment management and trust administration, and (iii) working with the client’s legal and tax advisors in the implementation of an estate plan.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.


Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.