Homeowners with families also need disability insurance to supplement their health insurance. It’s an important way to protect your assets. A disabled breadwinner can dissipate a family’s assets and security quickly.

Disability insurance has two forms, 1) short-term, (a 0 to 14 day wait period and up to two years coverage), and 2) long-term (extends benefits longer or until the disability ends). The Sources include; employers, a Social Security, VA, or privately purchased plans.

Short-term disability insurance helps if the disability is temporary. It varies by state and replaces part of your income. It can pay the mortgage, protect retirement savings, etc. Employers can add it as a voluntary benefit and pay for all, part, or none of it. If needed, you can also buy it directly from insurance companies. Two advantages of a private purchase are; 1) portability, to take your own coverage from job to job, and 2) it may cover a gap between your employer’s plan and your normal income.

Workers Compensation is different. It only triggers if the disability occurs on the job. Most states require it, and each is different. Most employers buy it to protect themselves from liability. It covers lost wages as well as medical care and rehabilitation, ongoing disability benefits, and/or modest death benefits. The Federal Employees’ Compensation program is an example to look at. It’s one of several programs the DOL Office of Workers’ Compensation Programs runs.

Social Security also provides two programs. Social Security Disability Insurance pays benefits if you worked long enough and paid Social Security, and Supplemental Security Income which pays benefits based on financial need.