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Understanding disability income insurance

Key Points

  • Disability income insurance provides income if you experience a long-term illness or injury.
  • Employer-sponsored policies often cover only a percentage of your current income.
  • By paying for a policy with after-tax dollars, benefits received are income tax-free.

Disability income insurance offers an extra layer of financial protection by replacing your income when you're not able to earn it due to a disabling injury or illness. Get more detail on the fundamentals of disability insurance here.

Why disability income insurance?

A sudden injury or illness could prevent you or your spouse from working. It could result in loss of income as well as additional expenses associated with the disability.

Employer-sponsored group disability insurance policies, Social Security disability benefits and personal savings may fall short of providing all of the income you depend upon.

An individual disability income policy can:

  • Replace a higher amount of your earned income
  • Cover bonus income
  • Provide benefits tax-free

Disability income insurance planning with Ameriprise

If you pay your premiums with dollars that have already been taxed, any benefits paid to you will be income tax-free. Retaining your own coverage gives you more control.

Your Ameriprise financial advisor can help you determine the disability income insurance that's appropriate for you. Your financial advisor can help you choose the right coverage based on:

  • Benefit amount. The percentage of monthly income you replace.
  • Length of time before benefits start. Also called the elimination period; similar to a deductible for medical or auto insurance. You typically choose 30, 60, 90, or 180 days.
  • How long the benefit will last. You can set the terms for a length of time to receive your benefit anywhere from one to two years up until age 67.
  • Definition of disability. This can be the most important part of a policy. The types of injuries or illnesses that can make it impossible to do your job are often much different from the types of disabilities that make it difficult. One type of injury may be covered and the other may not, depending on your choices.

Take the next step toward income insurance

To determine the type and amount of disability income insurance that's right for you, talk to a financial advisor.

Ameriprise Financial can help you protect what's most important with RiverSource® disability income insurance or a variety of insurance options offered through other providers.

Fixed Insurance:
Is not a Deposit | Is not FDIC insured | Is not insured by any Federal Government Agency| Is not a Bank, Credit Union or Savings & Loan Guaranteed 
Policies and features may not be available in all states, or may vary by state.
Before you purchase, be sure to ask your financial advisor about the insurance policy’s features, benefits, risks and fees, and whether it is appropriate for you, based upon your financial situation and objectives.
Issued by RiverSource Life Insurance Company, Minneapolis, Minnesota, and in New York only, by RiverSource Life Insurance Co. of New York, Albany, New York.  Affiliated with Ameriprise Financial Services, LLC.
Ameriprise Financial Services, LLC. Member FINRA and SIPC. CA License #0684538

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