Disability insurance, also known as disability income insurance or income protection insurance, is a type of insurance policy that provides financial protection to individuals who are unable to work due to a disability or injury. It is designed to replace a portion of the insured person’s income in the event that they become disabled and are unable to perform their job or any other occupation.

Disability insurance typically pays out a monthly benefit to the insured individual if they meet the policy’s definition of disability. The specific terms and conditions of the policy, including the definition of disability, are outlined in the insurance contract.

There are two main types of disability insurance:

1. Short-term disability insurance: This type of coverage provides benefits for a limited period, usually up to six months to two years, after the onset of disability. It is designed to provide temporary income replacement during a shorter-term disability, such as recovery from surgery or an illness.
2. Long-term disability insurance: This type of coverage provides benefits for an extended period, typically until the insured person is able to return to work, reaches retirement age, or the policy term expires. Long-term disability insurance is intended to protect against more serious and long-lasting disabilities that can prevent someone from working for an extended period or permanently.

Disability insurance benefits are usually based on a percentage of the insured person’s pre-disability income, typically ranging from 50% to 70%. The premiums for disability insurance policies are influenced by various factors, including the individual’s age, occupation, health, and the chosen coverage amount and duration.

It’s important to carefully review the terms and conditions of a disability insurance policy, including the definition of disability, waiting periods, benefit periods, and any exclusions or limitations, to ensure that it meets your specific needs and provides adequate coverage in case of disability. Consulting with an insurance professional or financial advisor can help you understand the options and select the right disability insurance policy for your circumstances.