Disability insurance covers income replacement when you are unable to work due to illness, injury, or disability. It typically covers a wide range of conditions, including both physical and mental health issues, whether or not they are related to your workplace.
What Disability Insurance Covers
- Injuries and illnesses: Common injuries (e.g., broken bones, back pain) and illnesses (e.g., cancer, heart disease, diabetes, arthritis, digestive disorders) are covered, including chronic pain and mental health conditions like depression
- Temporary and long-term disabilities: There are two main types:
- Short-term disability insurance (STD): Covers temporary disabilities lasting a few months (usually 3-6 months, up to a year), such as recovery from surgery, pregnancy complications, or short-term illnesses
* **Long-term disability insurance (LTD):** Covers more severe or permanent disabilities that prevent you from working for years or until retirement. It may cover conditions that stop you from performing your own occupation or any occupation, depending on the policy
- Rehabilitation and care costs: Some policies also cover rehabilitation expenses, therapy, and modifications to your home or car needed due to disability
- Income replacement: Disability insurance typically replaces 50% to 80% of your lost income to help maintain your lifestyle and cover living expenses like mortgage, utilities, loans, groceries, and more
What Is Not Covered
Coverage specifics depend on the policy, but generally, disability insurance is designed to cover the inability to work due to medical conditions rather than just medical bills. It can be used flexibly for any expenses while you are disabled
Summary
Disability insurance protects your income if you cannot work due to illness, injury, or disability. It covers a broad range of health issues, both short- and long-term, and helps with income replacement and sometimes rehabilitation costs, enabling you to maintain financial stability during periods of disability
