Disability coverage provides income in the event that a policyholder is unable to work and earn an income due to a disability. There are varying levels of strictness for the requirements to qualify under a particular plan. Some plans require that the individual’s disability be so severe that it prevents them from engaging in any type of meaningful work. Other plans only require that the individual demonstrate that they can no longer work in their same type of profession. Typically, plans with a more flexible definition of disability are more costly than those with a limited definition. People who obtained advanced degrees to become qualified in their field or who have a highly specialized field of work may want to invest in a more expensive plan. Disability insurance includes an elimination period, which is the amount of time an applicant must wait after becoming disabled before they can begin receiving benefits. This coverage is not meant to replace the disabled individual’s full salary, but rather covers a portion of their lost income. Premiums for this type of coverage can vary depending on the amount of income to be replaced, the length of time that benefits are paid and the policyholder’s medical history.

Disability insurance can be critical to your well-being in the event that the unthinkable happens and you are no longer able to work and earn an income.