Disability Insurance vs.
Workers' Compensation:
Why You Need Both
Many people assume workers' compensation covers them if they can't work. It doesn't - not for the 90% of disabilities caused by illness rather than workplace injury. Here's the critical difference, and why disability insurance fills the gap.
Call 877-PATRIOTComplete Comparison
| Feature | Disability Insurance | Workers' Compensation |
|---|---|---|
| What it covers | Any disability - illness, injury, on or off the job | Only work-related injuries and illnesses |
| Who pays | Insurance company (you pay the premium) | Employer's workers' comp insurance |
| Benefit amount | 60-70% of pre-disability income | Varies by state; typically 66% of wages |
| Medical coverage | No (separate health insurance needed) | Yes - covers all work-related medical expenses |
| Disputes | Between you and your insurer | Between you, employer, and insurer - often adversarial |
| Portability | Yes - follows you to any job | No - employer-specific |
| Coverage for illness | Yes - cancer, heart disease, etc. | Only if work-related (rare) |
| Coverage for accidents | Yes - on and off the job | Only if work-related |
Workers' Comp vs. Disability Questions
Does workers' compensation cover all disabilities?
No. Workers' compensation only covers injuries and illnesses that occur in the course of employment. If you get injured at home, develop a non-work-related illness (cancer, heart disease, etc.), or have a pre-existing condition that worsens, workers' comp does not apply. Since 90% of disabilities are caused by illness rather than workplace injury, workers' comp leaves most disability risk unprotected.
If I have workers' comp, do I still need disability insurance?
Yes. Workers' comp only covers work-related injuries and illnesses - which represent a small fraction of all disabilities. Disability insurance covers the much larger category of non-work-related disabilities. Additionally, workers' comp benefits are often limited and can be disputed by your employer's insurer. Disability insurance provides broader, more reliable protection.
Can I collect both workers' compensation and disability insurance?
Yes, with some limitations. If you're receiving workers' comp benefits, your disability insurance policy may offset (reduce) its benefit by the amount you receive from workers' comp. This is called an 'other income' offset provision. However, many individual disability policies do not offset for workers' comp, meaning you can collect both. Review your policy's offset provisions carefully.
Don't Rely on Workers' Comp Alone
Workers' comp covers a fraction of disability risk. Disability insurance covers the rest. Call us to fill the gap.