Worker's comp covers only those disabilities suffered on the job, and plans differ by state in benefits and eligibility. Social Security does not kick in until several months after a disability and carries numerous restrictions. And none of these may come close to paying 60 percent of lost income. A typical income-replacement plan pays policyholders if they can no longer work in the field in which they were employed or trained, or makes up the difference if they no longer can earn as much as they did in that field. Less expensive plans consider people disabled only if they cannot engage in any occupation.
Most financial advisers favor the former.
There's an enormous difference in definition and income. The shorter the period, the higher the cost. The average waiting period is 90 days, but some people may be a ble to extend that to a year or so by tapping into short-term benefits offered by employers or through emergency savings, he said. Buying through a group plan can cost 30 percent to 50 percent less than than buying an individual policy, Frantzen said. If a company does not offer a long-term plan, employees can ask if a group can be formed for that purpose.