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We all know that life insurance is a must when it comes to protecting our family’s financial well-being, but paying an additional premium for disability income (DI) insurance can feel like a low priority given the many demands on our budget.
Younger workers, in particular, often dismiss the need for private disability income insurance, unaware that their employer-provided DI benefits may provide neither the type nor the amount of coverage their household needs:
- Some workplace DI policies provide benefits only if the policyowner can no longer produce a paycheck at all, including at minimum wage jobs, while others limit coverage to the employee's base salary (not their bonuses or commissions).
- Benefits through employer-sponsored DI coverage may be taxable.
- Workplace DI policies may not be portable. When the policyowner leaves their job, they may be forced to purchase a new disability income insurance policy on their own, at which point their premiums would be higher because they are older. (Related: 6 ways group DI insurance may fall short)
Do I need disability income insurance?
Others underestimate the probability that a prolonged illness or injury may interrupt their income stream. That’s a potentially costly gamble.
According to the Social Security Administration, 1 in 4 (24 percent) of insured workers who attain age 20 can expect to be out of work for an extended period because of a disabling event before they reach retirement age. By comparison, the likelihood that an insured worker who attains age 20 may die before normal retirement age is just 13 percent.1
“People don’t like to think about disability, and they don’t want to believe that it could happen to them, but having had multiple clients with disability claims, the importance of DI coverage is very real to me.” said Peter Glassman, a founding partner of Wealth Insight Partners in Bethesda, Maryland.
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Education is key
The 2024 Insurance Barometer Study, conducted by LIMRA and Life Happens, shows that 46 percent of U.S. adults say they need some sort of disability insurance. Yet, currently, less than 1 in 5 consumers (18 percent) say they have it — and LIMRA estimates that true individual ownership may be far less. 2
Larry Singer, a partner and financial professional with New Jersey Life & Casualty in Livingston, New Jersey, said that the best way to combat “DI insurance denial” is education.
Working adults better appreciate the importance of disability income insurance, he said, when they understand the financial opportunity that their paycheck provides.
For example, a 30-year-old making $100,000 per year stands to earn a total of $3.5 million over the next 35 years. A highly paid doctor or lawyer might have earnings potential of $15 million to $30 million over the course of their career. But it doesn’t stop there, said Singer. They must also consider the investments they could make with their disposable income, which could potentially double the opportunity cost if their income suddenly stopped.(Related: Why do dentists get so much disability income insurance?)
“Your family is supported by a very thin thread, which is your income,” said Singer. “Your mortgage, car payments, and insurance premiums don’t stop just because you experience a loss of income. You could have a $500,000 mortgage and $100,000 in equity in your home, but if you can’t pay your mortgage, you may very well lose all that equity because you have to take out a home equity loan to support yourself or you have to file for bankruptcy.”
Nearly two-thirds (62 percent) of Americans who file for bankruptcy cite medical bills as a contributing factor for their financial collapse.3 Many of those who filed for medical bankruptcy have health insurance, but buckle financially under the weight of copays, deductibles, and coverage limits. The added expenses build up quickly.
Most American households are vulnerable to a temporary loss of income because they do not have adequate savings set aside. Nearly 76 percent of individuals reported that they would experience some degree of financial hardship if their paychecks were delayed by even a week, according to the latest report from PayrollOrg.4
Financial protection products, such as disability income insurance, help ensure that an injury or illness that prevents you from working does not derail your family’s ability to make ends meet. It’s the foundation upon which all other financial goals are built, said Singer.
“A financial strategy can be really meaningless if you don’t have disability income insurance,” he said. “At its most basic, it’s about having contingencies in place to provide for yourself and your family in the event of a job loss, disability, or premature death. That means having an emergency savings fund in place, along with disability income insurance and life insurance coverage.”
Holes in the safety net
Before you dismiss the need for DI insurance coverage, you should also be aware that the public safety net has limitations.
Many assume that workers’ compensation or Social Security Disability Insurance (SSDI) would replace a portion of their paycheck if a disabling event prevented them from working. That’s not necessarily true. Those who become disabled off the job don’t always qualify for SSDI.
The Council for Disability Income Awareness notes that adults are far more likely to experience a serious illness or injury outside of the workplace, in which case they would be ineligible for workers’ compensation.
The most common causes of disability include: 5
- Musculoskeletal disorders
- Cancer
- Pregnancy-0related issues
- Mental health disorders
- Injuries
- Cardiovascular conditions
- Nervous system disorders
- Infectious diseases
- Digestive disorders
- Respiratory diseases
Those who do qualify for SSDI collected an average monthly disability benefit in 2026 of about $1,635 — barely enough to keep most families above the poverty line.6 (Related: Social Security disability benefits: A lifeline for many but not for all)
MassMutual’s disability income insurance calculator can help you determine how much coverage may be appropriate for your household. For more personalized guidance based on your unique financial picture, you can also consult a financial professional.
Buy DI insurance early to save more
Part of the reason many people postpone the purchase of DI insurance is the perceived cost.
Premiums vary widely depending on your health history, age, occupation, and the type of policy you select, but the average DI policy costs anywhere from 1 percent to 3 percent of your annual income, according to Policygenius.com.
Singer said young adults, including those with employer-sponsored DI coverage, have a unique opportunity to save on DI premiums, due to their age.
“When my kids graduated from college, I bought them each a disability policy with a monthly benefit of $3,000, plus a future income option — FIO — that allowed them to purchase up to $6,000 more in monthly benefits without medical underwriting, as their income allowed,” said Singer. “For a premium of about $1,300 per year, I essentially put them in the position to control up to $9,000 in monthly benefits at a very nominal cost. Now their friends are starting families and starting to buy disability income insurance, and they can’t believe how little my sons are paying for theirs. That’s something that I recommend to all parents.”
Be aware that disability income insurance — whether company-paid group plans or private policies purchased independently — is not designed to replace your entire income. Most typically cover about 60 percent of your annual pay.
As such, Glassman said he recommends working adults purchase as much DI insurance coverage as the industry will permit them to buy.
“Get as much DI coverage as you can get underwritten for,” he said. “Most people are not in a position to live on a lot less than they make.”
Singer notes, however, that would-be policyowners should not be dissuaded from purchasing DI coverage due to cost. If you can’t initially afford the benefit amount you need, start small. Get what you can afford today, consider purchasing future income options to stretch your available benefit, and add coverage as your income allows.
“I believe that any amount of disability income insurance coverage is better than no disability income insurance coverage,” he said.
Since 1851, MassMutual has been focused on helping people secure their financial future and protect the ones they love. That mission is why we have thousands of financial professionals to assist you on your journey through insurance, investing, retirement planning, estate management, and more. You can find a MassMutual professional with this tool or you can let us know you’d like to talk to one and we’ll have one of our financial professionals contact you.
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Frequently Asked Questions about disability income insurance
Q: How much disability income insurance coverage do I actually need?
A: A sound starting point is to assess your monthly essential expenses — housing, food, transportation, insurance premiums, and debt obligations — and ensure your policy would cover those costs during a period of disability. A financial professional can help you evaluate any existing coverage gaps, factor in your family's needs, and build a protection strategy that reflects your specific circumstances.
Q: When is the best time to purchase a disability income insurance policy?
A: The earlier, the better. Disability income insurance is most affordable and most accessible when you are young and in good health. Waiting until a health condition arises can make coverage significantly more expensive or difficult to obtain. It is one of those financial decisions where acting proactively — before you need it — makes all the difference for you and the people who depend on you.
Q: Don't I already have disability income coverage through my employer or the government?
A: Employer-sponsored group disability coverage, when it exists, often falls short of what most households actually need. Benefits may be capped, taxable, or tied to a narrow definition of disability. Social Security Disability Insurance, meanwhile, can be difficult to qualify for and may take months or years to receive. Neither source is designed to fully replace your income or account for your specific financial obligations and lifestyle.
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Discover more from MassMutual…
Disability facts that may surprise you
How to use disability income insurance for financial help
Need financial advice? Contact us
This article was originally published in June 2021. It has been updated.
1 Social Security Administration, "Fact Sheet,” 2025.
2 LIMRA and Life Happens, “2024 Insurance Barometer Study,” July 15, 2024.
3 Roosevelt Institute, “The US Medical Debt Crisis,” May 15, 2025.
4 PayrollOrg, “Getting Paid in America,” Sept. 14, 2022.
5 Council for Disability Income Awareness, “Common Causes of Disability,” 2026. 6 Social Security Administration, “Selected Data From Social Security’s Disability Program,” March 2026.
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