Disability Insurance

Overview

Disability insurance is a type of insurance that provides income in the event of a disabling accident that leaves the insurance holder unable to work. Disability insurance generally includes paid sick leave, and both short- and long-term disability benefits.

Most employers provide disability insurance to their employees who work risky jobs. In many cases, it is cheaper and easier for the employer to provide disability insurance rather than go to court over a lawsuit with an injured employee.

Disability insurance often comes in the form of worker’s compensation, which functions as income insurance by providing lost income, health insurance by covering medical expenses, and life insurance by paying benefits to the families of workers who are killed on the job.

For those who are not covered by disability insurance through their job, individual disability insurance is also available. Individual disability insurance functions similarly to other types of disability insurance. Policies vary in price relative to the broadness of terms in which the policy defines disability.

Cheaper disability insurance tends to cover a smaller variety of circumstances and vice versa.