Disability Insurance
Disability insurance provides coverage to individuals who are sick or injured and cannot work in order to earn income.
There are classically two types of disability insurance: short-term disability and long-term disability.
Disability comes from both the public and private sectors. In the public sector, Social Security Disability Insurance was instituted to provide a backstop against the loss of wages due to illness or injury. In the public sector, which most people get through their places of employment, traditional short- and long-term disability coverage is often offered.
Worker’s Compensation is form of disability protection that is activated when an employee loses the ability to work as the result of an accident or injury at the workplace.
Individuals can buy disability insurance if it is not offered as part of their benefits package at work; however, the premiums for these policies are often high. The amount of the premium is usually determined by the amount of the payout provided if a claim is made against the policy, and the duration of the allowed claim period. Another factor determining the premium is the amount of time the claimant agrees to wait before filing a claim after an injury and loss of employment has transpired.