Disability Insurance for High Earners

Part 1

The layers you may already have

Social Security disability (SSDI)

You generally qualify only if you can't do substantial work of any kind and your condition is expected to last at least a year or result in death.¹ For high earners, the benefit also replaces a small share of income.

California State Disability Insurance (SDI)

Funded by employee payroll withholding (1.3% of wages in 2026). The weekly benefit is capped at $1,765 for claims starting in 2026.² Many self-employed people aren't covered unless they opt in.

Employer group long-term disability

Often replaces around 60% of salary up to a monthly cap. High earners frequently find the cap leaves most of their income uncovered, and bonuses or K-1 income may not count.

Part 2

What "own occupation" means

The definition of disability decides whether a policy pays. The two ends of the range:

Definition	Pays when you can't…	Example: a surgeon with a hand injury
Own occupation	Do the main duties of your own job	Can likely collect, even while teaching or consulting
Any occupation	Do any job you're reasonably suited for	May not collect if able to work in another role

Many policies use a blend, such as own occupation for the first two years, then any occupation. Some own-occupation policies stop paying, or reduce payments, if you work elsewhere. The exact wording matters.

Part 3

Features people compare

Non-cancelable and guaranteed renewable: the insurer can't cancel the policy or raise the premium as long as you pay it, up to a stated age. Guarantees depend on the claims-paying ability of the issuing insurer.
Elimination period: how long you wait before benefits start, often 90 days. Longer waits usually cost less.
Benefit period: how long it pays, for example to age 65 or 67.
Residual or partial disability: pays part of the benefit if you can work but earn less.
Cost-of-living adjustment: raises benefits during a long claim.
Future increase option: lets you buy more coverage as income grows without new medical exams.

More features mean higher premiums. The right trade-off depends on your income, savings, other coverage and how long you could go without a paycheck.

Part 4

Group coverage vs. your own policy

Through work

Helps withLow or no cost, little or no medical underwriting.

Watch forIncome caps, taxable benefits if the employer pays,³ and the coverage usually ends if you leave.

An individual policy

Helps withGoes with you from job to job, can use own-occupation wording, and benefits are generally tax-free if you pay with after-tax money.³

Watch forHigher cost and medical underwriting. It's easier to qualify while you're young and healthy.

Business owners can also look at coverage that pays business overhead or funds a buyout if an owner is disabled. See The Buy-Sell Agreement Nobody Updated.

Is your income protected if you can't work?

A conversation can line up what your employer plan, California SDI and any personal coverage would actually pay, so you can see the gap, if there is one.

Book a time with Kevin Educational only. Policy features, definitions and costs vary by insurer and state, and coverage is subject to underwriting.

Sources

Social Security Administration, Disability Benefits: How You Qualify. Accessed November 10, 2026.
California Employment Development Department, Contribution Rates, Withholding Schedules (2026 SDI rate) and 2026 maximum weekly benefit amount. Accessed November 10, 2026.
IRS, Publication 525, "Sickness and Injury Benefits." Accessed November 10, 2026.