Disability Insurance/Disability Income Insurance Definition
The Dictionary of Insurance Terms and Definitions
Disability insurance, also called disability income insurance, pays a benefit, not when an insured person dies but when he/she becomes unable to carry out his/her normal employment because of injury or illness.
The benefit you receive from disability insurance is typically a series of payments, issued periodically so that they mimic the income payments that one normally receives as an employee. This disability insurance income stream may last for a number of months or a number of years, depending on the policy and the type of disability. There are many options.
A disabling injury or illness need not be lifelong for disability insurance to pay out, but it does need to last for a certain minimum duration, which varies by policy. That is, if a disabling injury obliges you to miss only a week of work at the office or around the house, the insurance policy is not likely to pay any disability income.
You might already have disability income insurance through your employer or through the state. Your employer should be able to tell you whether you have any and, if so, how much you have. Compare your current amount of disability insurance coverage to your current income.
