The odds of becoming disabled during your working years are far higher than most people realize: a 35-year-old has a 50% chance of a 90+ day disability before age 65. Disability insurance is the most commonly missing piece of American financial plans.
The exposure most people don't know they have
- 3-in-10 workers will experience disability lasting 90+ days during their working years (Social Security Administration)
- Average long-term disability claim: 31.6 months
- Most common causes: musculoskeletal disorders, cancer, mental health — not accidents
What employer disability plans typically cover (and their limits)
| Short-term disability (STD) | Long-term disability (LTD) | |
|---|---|---|
| Waiting period | 0–14 days | 90–180 days |
| Benefit period | 3–6 months | 2 years to age 65 |
| Benefit amount | 60–70% of salary | 50–60% of salary |
| Tax status if employer pays premium | Taxable benefit | Taxable benefit |
Own-occupation vs any-occupation: the critical distinction
Own-occupation: Pays if you can't perform the duties of YOUR specific occupation. A surgeon with a hand injury who can't operate but could work a desk job still receives benefits.
Any-occupation: Pays only if you can't work in ANY occupation. Much harder to qualify. Most group employer plans switch from own-occupation to any-occupation after 2 years.
When to buy individual disability policy
- You have high income that would be significantly disrupted by disability
- Your employer plan caps at 60% of salary (you want 70–80%)
- Your employer's plan uses any-occupation definition after 2 years
- You're self-employed with no group plan at all
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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