What is Disability Insurance?
Disability insurance is a type of insurance product that provides income replacement if you become unable to work due to an illness, injury, or medical condition. Think of it as “paycheck protection”—while health insurance covers your medical bills, disability insurance ensures you still receive money to cover your everyday living expenses (such as rent, mortgage, utilities, and groceries) when you lose your primary source of income.
Feature | Short-Term Disability (STD) | Long-Term Disability (LTD) |
Purpose | Covers temporary medical conditions or immediate recovery periods. | Protects against severe, prolonged illnesses or permanent impairments. |
Elimination Period | Typically 0 to 14 days after the injury or illness occurs. | Typically 30 to 180 days (often begins when STD benefits expire). |
Benefit Period | Usually lasts 3 to 6 months (sometimes up to 1 year). | Can last 2 years, 5 years, 10 years, or until retirement age (often age 65). |
Common Examples | Recovery from minor surgery, childbirth, bone fractures, short-term illness. | Cancer treatment, debilitating spinal injuries, neurological disorders, chronic arthritis. |