Fact Checked Updated: Jan 3, 2024, 6:04am There is a 25% chance of 20-year-old workers developing a disability before retirement age, according to the Social Security Administration. One option to help financially if one becomes disabled is long-term disability insurance, either provided by employers or bought as an individual policy. Companies such as Mutual of Omaha, MassMutual, Ameritas, Assurity, and Principal each offer robust disability insurance options with various benefit levels, elimination periods, and lengths of benefits.

Long-term disability coverage pays a portion of lost wages if you’re injured or become ill and can no longer do your job. Depending on the policy, these benefits may be available for many years; for example, five or ten years. If you’re buying an individual policy, you’ll choose the length and the age limit for the coverage; for example, coverage until the age of 65.

Long-term disability insurance is different from short-term disability insurance, which is typically only offered by employers and covers a smaller period of disability. It’s also different from Social Security Disability Insurance (SSDI), offered through the government if you can’t work and you’ve contributed to social security.

Insurance companies consider how injuries or medical conditions affect an individual’s ability to work when reviewing claims for long-term disability insurance. However, not every injury or illness is covered.

The cost of an individual long-term disability insurance policy generally falls between 1% to 3% of your annual salary, according to Life Happens, an industry-funded group that provides insurance education. So, if you earn $100,000 per year, your disability insurance could cost between $1,000-$3,000 annually or $83-$250 monthly. Other factors that influence this cost include age, gender, occupation, and the state or country of residence.