Disability Insurance: A Complete Guide for 2025
What is Disability Insurance? Disability insurance is a contract between an individual and an insurer. In exchange for premiums, the insurance company pays a percentage of the policyholder’s income if they become disabled and cannot perform their work duties. Types of Disability Insurance Type of Coverage What It Includes Who Should Consider It Short-Term Disability Insurance Provides income replacement for a limited period, usually 3–6 months Employees needing coverage for temporary disabilities Long-Term Disability Insurance Covers extended disabilities that last years or until retirement Professionals and workers relying heavily on income stability Individual Disability Insurance Purchased directly by individuals, offering customizable benefits Self-employed or those without employer-provided coverage Employer-Sponsored Plans Group policies offered through workplaces, often at lower cost Employees of medium to large companies Government Programs Social Security Disability Insu...