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Why you need both life insurance and disability insurance

Amy Fontinelle

Posted on December 15, 2022

Amy Fontinelle is a personal finance writer focusing on budgeting, credit cards, mortgages, real estate, investing, and other topics.
Why you should get disability insurance and life insurance
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Point out that while we hope otherwise, misfortunes can and do happen to people.

Use an example to illustrate how life insurance can help a family move on and cope with the loss of a loved one.

Describe how disability income insurance can provide help in cases where you can’t work due to illness or injury.

It’s not something anyone likes to think about, but life-altering illnesses and injuries happen every day.

We wouldn’t be able to get out of bed in the morning if we fixated on all the ways we could hurt ourselves: car accidents, bike accidents, tripping and falling during a run, slipping and falling in the shower — just to name a few.

Then there are all the disabilities that can creep up on us, like chronic back pain or migraines, and the ones that can result from serious illnesses, such as multiple sclerosis, ALS, cancer, or rheumatoid arthritis.

In fact, just over one-in-four of today’s 20-year-olds will find themselves unable to work at some point during their career because of an illness or injury.1

On top of that, there are also lots of ways to die prematurely — many overlapping with ways to become injured or disabled. Any of these scenarios can have significant financial impacts on you or your family.

But there are ways to help protect against such circumstances.

To illustrate, consider the following hypothetical examples based on the experiences of real, everyday people. One illustrates how life insurance can help provide protection for your family should something unexpected happen to you. The other shows how disability income insurance can help with income needs should an illness or injury prevent you from working.

Life insurance

One ordinary day, Erica came home from work to find her husband Blake unconscious on the kitchen floor. She couldn’t wake him up. An autopsy would reveal that he’d had a brain aneurism that morning and died instantly. He was in his 40s with no health problems. He left behind two daughters and his wife — his high school sweetheart.

Fortunately, Blake had a life insurance policy to provide for his family. He was a successful salesman whose income helped pay the mortgage and his daughters’ college tuition bills. During a period of incredible grief at the sudden loss of their husband and father, Erica and her girls didn’t have to worry about losing their home or dropping out of school. They could focus on mourning without any other major disruptions in their lives.

Giving loved ones a way to cope with situations like Erica’s is a compelling reason to buy life insurance. Term policies are typically inexpensive, especially if you’re young and healthy. Even if you aren’t, a good financial professional can usually help you find the right policy for your circumstances. (Calculator: How much insurance do I need?)

Permanent life insurance policies are more expensive, but they provide coverage for as long as you live for a steady premium, whereas term policies typically are designed for shorter time frames. For this reason, permanent policies can also help with estate planning and reducing death taxes.

In addition, they build cash value over time, making them an option for funds in later years. Of course, accessing the cash value of a life insurance policy increases the likelihood that the policy will lapse, reduces the cash value and death benefit, and may result in a tax bill if the policy terminates before the death of the insured. (Related: How whole life insurance can help through life stages)

Long-term disability income insurance

A disability can affect your mind, body, or both. It can affect your vision, movement, thinking, memory, learning, communicating, hearing, mental health, and social relationships. And it can affect your ability to earn a living: your most valuable financial asset.

Financially, a long-term disability or illness can have a greater financial impact than premature death. You still have living expenses, but you also have increased health care expenses—without any way to make money to pay for them.

Xavier was a young doctor when he learned he had a rare and aggressive form of cancer—and it was already in stage 4. He had to put his plans on hold and immediately enter treatment. He needed chemotherapy, then a bone marrow transplant. With his compromised immune system, not to mention weakness, exhaustion, and other side effects of treatment, he couldn’t leave his hospital room, let alone work. And although his cancer went into remission, the life-saving treatment left him with trouble walking and numbness in his fingers that called into question his ability to work as a doctor. (Calculator: What would a disability do to my finances?)

Few people Xavier’s age have the foresight to purchase disability income insurance or even know it exists. But Xavier did, because a fellow doctor recommended it. He even got a specialized policy, which pays out if Xavier can’t find work as a doctor due to long-term illness or disability. He won’t be forced to work in whatever job he can get without full use of his hands. Instead, he gets a monthly check to help cover his living expenses and medical bills and allow him to retrain for a different career that suits his present abilities.

Xavier could have relied on Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), like many disabled Americans do. But his coworker had cautioned him against it. Applicants face a low approval rate to receive benefits and the possibility of having to appeal a claim or even hire a lawyer. The wait time for an appeals hearing can be extraordinary: one to two years. And the Social Security Administration is meant to be a last resort for disability income; unlike private insurance, it would make Xavier work in some other job that required minimal use of his hands before it would pay him benefits. Even if he did qualify, his benefits would likely be a fraction of what a private policy would pay him. (Related: Is disability income insurance worth it?)

Adding insult to injury, those benefits could be taxable, whereas a private policy’s benefits would not be, assuming Xavier had paid the premiums out of his take-home pay (with after-tax dollars).


A financial professional can provide you with quotes and different policy options tailored to your circumstances.

Both types of insurance are cheaper when you’re younger. You’ll be paying premiums for more years, but you’re more likely to be insurable and get coverage when it's most affordable.

We all like to think that serious illness, disability, and premature death won’t ever happen to us or to our loved ones. But one way to make the possibility less scary is to buy the right insurance. Knowing that you’ll have the financial support you need in a challenging time will make life’s uncertainties and misfortunes less difficult to endure.

Learn more from MassMutual…

7 things financial planning does for you

Working with a financial professional vs. DIY

The essentials of budgeting


1 Social Security Administration, “Disability Facts.”

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.