About Disability Insurance

What is Disability Insurance?

Disability insurance is a type of insurance coverage that provides income replacement when you are off work due to any type of accident, whether it is on the job or not. It protects you and your family from the loss of income that comes from an injury or accident. Depending on the policy you purchase, your insurance provider will cover a portion of your monthly income so you can still pay bills while you are recovering.


Disability benefits are based on your income combined with your current health and in the case of business insurance the cost to run the business. Most companies pay a maximum benefit which is a portion of your current income.


There are many different types of disability coverage for businesses and individuals, and some of the most important are described below.


  • Individual Disability Insurance – This insurance is usually used by individuals that want to add more disability insurance than what their employers offer, as well as for self employed individuals who do not have any coverage through an employer. Anyone can apply for this type of disability insurance for income replacement.
  • Key-person Disability Insurance – This type of disability insurance provides coverage benefits to a company that has more than one person in a position of control in the company. These people are considered key people as they keep the business running and are usually owners. It protects the other owners of the firm if one person becomes ill or disabled so the company can continue to operate.
  • Business Overhead Insurance – A type of insurance that provides the owner of a small business a payment that will cover all the bills to run their business. This includes payment for building rent and maintenance, salaries and wages and any other regular payments made to keep the business running.

What are the Benefits of Disability Insurance?

Disability insurance provides the insured with the peace of mind that whatever may happen to them there will always be a safety net that will help them and their family get through it.


It is important to shop for disability insurance as lower priced policies do not always offer the best benefits. Sometimes the waiting periods are longer or the payout is smaller. Shopping the best price but also the best benefits of each policy offered are beneficial to help you get the proper coverage you need.


Disability Insurance Statistics

The average long term disability claim is 31.2 months. One in 8 workers will be disabled for 5 years or more during their working in careers. 30% of workers entering the workforce today will be disabled for 3 or more months. Medical problems contributed to 62% of all personal bankruptcies filed in the US in 2007.


Why Would Someone Want Disability Insurance?

You don’t count on being in an accident or hurting yourself on the job but it happens. If it does happen to you, wouldn’t you like to have the confidence that your business and family will be able to pay the bills even if you aren’t around for the time being? Disability insurance provides coverage to get through the recovery without worrying about making sure there is enough money to make ends meet.