It’s important to have disability coverage whether you get it from your employer, or purchase it privately. Disability insurance is your paycheck if you’re sick or disabled and can’t work for an extended period of time. That being said, the question then becomes where do you get the better deal; from your job, or on your own?

The most significant difference between group and individual plans is eligibility. Because you’re an employee, you qualify for coverage at work usually on a guaranteed issue basis. However, it isn’t that easy when you apply for an individual policy. A private insurer will require you to meet stringent medical and financial criteria.

Coverage provided through a group plan offers no flexibility. If you become disabled, you are either paid a percentage of your salary, or a fixed amount each week or month. Benefits continue until you recover, or until you reach Social Security retirement age. Typically there are no cost-of-living adjustments to increase your benefits in step with inflation.

An individual policy lets you choose the monthly benefit amount, waiting period and maximum period of payments. You can also customize a policy to cover a specific occupation, and add cost-of-living increases.

Policy features to consider

• What is the insurer’s definition of disability?
• Is it portable when you change jobs?
• Are the benefits taxable?
• Does the policy include residual and recovery benefits?

A group plan limits coverage and definitions of disability, but it’s subsidized by the employer, so it will probably be less expensive. However, if your situation warrants quality and quantity of coverage, then buying your own disability insurance is the better option.