A hand rests on the wheel of a wheelchair

What is Disability Insurance?

Disability insurance protects people who want to ensure that they will have an income if they have a medical illness or some other catastrophic problem. This helps give people with medical illness peace of mind that they may not normally have. Let’s take a look at the different types of disability insurance.

  1. Individual Disability Insurance
    Individual disability insurance is different from company to company and state to state. Individual premiums tend to be higher in general, but may cover a wide variety of circumstances or illnesses. Some companies offer web-based disability insurance calculators to assist in determining the type of insurance required.
  2. High-Limit Disability Insurance
    If you want to remain at 65% of your income while disabled, this is the disability insurance for you. This coverage is usually issued in addition to any standard coverage. Most high-limit disability insurance will pay out anywhere from $2000 to $100,000 every month. Single policy issue is different; in some companies, coverage has gone up to $30,000.
  3. Key-Person Disability Insurance
    When you obtain key-person disability insurance, it will protect a company from the loss of a key employee. Companies often obtain this type of insurance to hire a temporary employee if the employee's disability is short-term. This type of insurance will also cover the costs of hiring a replacement if necessary. Insurance may cover the cost of recruitment and training. It may also cover the loss in revenue and any other startup or unfunded salary continuation costs.
  4. Business Overhead Expense Disability Insurance
    Business overhead expense disability insurance, or BOE coverage, will reimburse an owner for overhead expense if the owner cannot work due to a disability. This includes rent or mortgage payments, leasing costs, utilities, business insurance, employee salaries, and property tax.
  5. National Social Insurance Programs
    National governments also provide disability insurance for its citizens. For instance, in the United States, workers will receive social security. Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are both aspects of social security that may be utilized by citizens. In the UK, they incorporate disability into National Insurance. Any uninsured person will be captured under the safety net provided by the government. The benefits are usually enough to prevent a person from going into poverty.
  6. Employer-Supplied Disability Insurance
    On-the-job injury is the second largest form of insurance for disability. There are several types of insurance that may or may not be included in a disability package.