US 2028 Disability Coverage
2028 LTD coverage: replace 60-70% income to age 65. Employer LTD pre-tax = taxable benefits; private LTD post-tax = tax-free benefits.
| Target monthly benefit | — |
| Monthly gap after SSDI | — |
| Emergency runway | — |
| Suggested annual coverage | — |
Long-Term Disability (LTD) insurance replaces income if you can't work. Industry standard: replace 60-70% of pre-disability income to age 65. Employer LTD often pre-tax premiums (cheaper but benefits taxable). Individual LTD post-tax premiums (more expensive but benefits tax-free). Combined approach often optimal.
Employer vs Individual LTD
Employer LTD: cheap (sometimes free), pre-tax premiums = taxable benefits. Often capped at 60% of income, max $5,000-$10,000/mo. Individual LTD: post-tax premiums = tax-free benefits. More portable, customizable definition of disability.
'Own Occupation' Definition
'Own occupation' definition: disability if can't perform YOUR specific job (surgeon vs general medicine). 'Any occupation' definition: disability only if can't do ANY job you're qualified for (much harder to claim). Specialists (doctors, lawyers, engineers) need own occupation.
Waiting Period + Benefit Period
Waiting period: 60-180 days (longer = cheaper). Benefit period: typically to age 65. Lifetime benefits available but expensive. Match waiting period to emergency savings (6 months expenses = 180-day wait often works).
Last updated May 2026. Sources: NAIC.