Offered by many employers, disability insurance replaces some of the income lost
when an individual is unable to work due to an illness or accident. While coverage
does not specifically cover long term care or health expenses, you can use payments
as you see fit.
Replaces a predefined percentage of income while you are unable to work.
Employer-sponsored coverage is generally available only while you're employed by
the company and benefits are paid up to age 65. There is typically no coverage or
benefits after you've retired.
Individual may use funds for any purpose, including long term care costs.
It replaces only a portion of your salary and may be taxable. The coverage is
subject to time limits. Since the proceeds might be needed for rent, mortgage
and typical household expenses, it is unlikely to cover all the long term costs
one might incur.