Disability income coverage replaces income lost by an employee when injury or illness prevents the individual from working. Generally, disability income policies are divided into 2 types:
-Those that provide benefits for up to two years (short-term)
-Those that provide benefits for a longer period, usually for at least five years, to age 65, or for a life-time (long-term).
When provided on a group basis, the benefits are usually integrated with benefits from Social Security and other public programs. The entire range of benefits from these sources generally is set at a level that does not exceed 60 percent of earnings.
Individual disability income policies usually pay a fixed dollar amount of coverage. This amount may be greater for those who are turned down by Social Security. Individual disability income policies take many forms and may be designed to fit the special needs of the individual policy owner.
