The most valuable financial asset you own may be your ability to earn an income.
While you may have seen this idea before, it is a concept that many people take for granted or underestimate. So, it bears repeating.
Your ability to earn an income is one of your most important wealth-building tools.
You, Inc.
Think of yourself as the enterprise called, You, Inc. You’re the only employee of You, Inc., which means that the organization’s success or failure rests on your shoulders. As a thriving enterprise, you can purchase housing, transportation, food and all the other things that you—and your family—enjoy.
But what if You, Inc. hits a rough patch? What if You, Inc., stops generating income or experiences an unplanned downturn?
The Why’s & How’s of Disability Insurance
Some people who avoid thinking about disability insurance have been known to utter the infamous phrase “I hope it will never happen to me.”
Remember: Hope has never been a sound financial strategy–especially when it comes to your family’s future.
“The prudent see danger and take refuge, but the simple keep going and pay the penalty,” Proverbs 27:12
The Social Security Administration found that one in four workers will become disabled at some point during their working years. And accidents are not usually the culprit. Back injuries, cancer, and other illnesses cause the majority of long-term work absences. The duration of the average long-term disability claim is 34.6 months.1
Disability insurance may be part of the benefits package offered through your employer. In some instances, employer plans can pay up to 60% of your income, which may be enough to cover your bills for a short period.
The limits on employer-sponsored disability programs are one reason why some people look to purchase private individual plans, which can cover up to 90% of your income.2
Disability Tax Facts
When you purchase disability insurance on your own, the benefits generally are not taxable since you paid for the policy with after-tax dollars. With employer plans, however, the income you receive may be taxable if the employer paid for the benefit.2
We’re not disability tax experts, but we are associated with companies that are. If you want to learn more about the tax status of disability payments, we encourage you to speak with your tax professional or ask our tax planning department. They might be able to help.
Disability Coverage
Disability insurance also has what’s called a “waiting period,” which is the amount of time before your coverage kicks in. With disability insurance, there are short-term and long-term policies. Waiting periods can be as short as 30 days or as long as 365 days depending on the type of coverage.3
When we work with people like you who may have questions about disability, we first want to see if your employer offers coverage and how the plan is structured. Once we have a better understanding, we can discuss how a private plan would work in your situation.
You, Inc., can be a critical tool in your overall wealth-building strategy. Don’t overlook tools that are designed to help You, Inc., and all the people it touches.
- GuardianLife.com, 2025
- USBank.com, 2025
- MutualofOmaha.com, 2025
