Disability Insurance

Disability insurance provides benefits to an individual unable to work at his or her normal place of employment due to an injury or illness. This type of insurance is designed to provide compensation as a replacement for some of the income the injured or ill individual typically would have received from his or her employer.

Who Should Consider Disability Insurance?

The reality is that any working person bringing in an income, particularly an individual with a family, should consider and would benefit from this type of insurance. Many people presume that worker’s compensation insurance will provide necessary financial protection in the event of an injury or illness. However, it is crucial to bear in mind that worker’s compensation benefits only exist if an individual is injured at the workplace. The reality is that oftentimes a worker contracts an illness or sustains an injury outside the workplace that can cause disability.

How This Type of Insurance Works

When a person sustains an injury or becomes ill and unable to work, he or she files a claim with a an insurance carrier that provides this type of coverage (in the same manner a person files a claim for any other type of insurance). The insurance company reviews the claim, determines eligibility for compensation and tenders payment to an insured person if the claim is approved.

Different Types of Disability Coverage

This type of insurance comes in a variety of different forms, with varying types of coverage. The most common type of insurance designed to aid in the event of a disability provides compensation to cover a portion of the income or wages a person normally would have earned in the absence of the injury or illness. Other types of policies provide more extensive wage related compensation and assistance with other expenses incurred by a person during a period of disability

General Benefits of Disability Coverage

As noted previously, the primary benefit offered through this type of insurance is replacement of some or all of a person’s wages. Some policies include provisions providing for the payment of a mortgage or rent. A worker needs to bear in mind that this type of insurance typically includes a waiting period between the onset of a disability and the date on which payments or compensation commences. This period varies from one policy to another.