Home Finance Disability Insurance: How Does Disability Insurance Works

Disability Insurance: How Does Disability Insurance Works

disabilities insurance

We purchase insurance for a lot of things like cars, houses, health, and lots but we need to cover the most important aspect of our life how we earn income when our income means stopped and lot. In this article we will e talking about disability insurance, what it is, how it works, its benefit of it, the types of disability insurance we have, and a lot more.

What Is Disability Insurance

This is the type of insurance that covers you from unexpected injury, illness, or anything that prevents you from earning and making an income that sorts your living. There is a private insurer, and sometimes government or your employer can insure you.


Disabilities here are not necessarily physical disabilities but any disabilities that prevent you from earning income to sort out your needs

Types of disability insurance

There are two main types of disability insurance policies which are Long-term disability insurance and Short-term disability insurance.


Long-Term Disability Insurance

This types of disability insurance have several waiting periods like several weeks and months but basically, financial protection does last for more than 2 years. While some other policy providers do cover till the entire retirement age.

Short-Term Disability Insurance

his type of disabilities insurance covers immediate financial support for policyholders ranging from 0 to 14 days to a maximum of 2 years

Riders are also available, in case you want to purchase long-term disability insurance there are some that can combine short-term disabilities with long-term disability insurance. Here when short-term expires then long-term disability insurance takes effect with the help of the rider. This will of course have a corresponding increase in premiums being paid.

Before we brief on how this disabilities insurance works let’s talk about what it covers.

What does disability insurance cover?

This type of insurance covers a lot of illnesses and injuries that some other types of insurance like workers’ compensation among others did not cover as long as these injuries and illnesses deprive you of earning income.

Disabilities insurance covers these medical conditions:

  • Broken bones
  • arthritis
  • Hive Infection
  • Fractures and dislocations
  • spinal injuries
  • cancer
  • concussion
  • diabetes
  • multiple sclerosis
  • Depression
  • Muscle pain
  • anxiety disorder

But at the same time, injuries encounter while committing a crime, and self-inflicted injuries and illness are not covered by disabilities insurance.

How does disability insurance work

Subsequently, on normal insurance, the policyholder will be protected against unforeseen loss where the insurer reimburses the policyholder in case of property loss, casualty and lot based on the type of insurance but in disabilities insurance, this type of compensation is related to the loss of income caused by disabilities.

If a workers earn a certain amount of money monthly and got disabled or got a certain disability that prevents them from working and earning their monthly income again then the insurance company will compensate the policyholder with a portion of the lost income after reviewing that they are qualified or the incident is covered by this policy. This means disabilities insurance covered the opportunity cost of the disabled policyholders

Though policyholders will not just get qualified for this type of insurance so as not to miss use it there are some conditions the policyholders must satisfy in other to receive payment.

If this insurance is government-sponsored disability insurance for you to qualify the policyholder must prove that their disabilities are truly severe and prevent them from working to curb workers pretending to have a severe injury while it’s minor.

Also, some private insurers always require applicants to demonstrate that their disabilities really prevent them from doing their previous work. Also, The Social Security System also require applicant to show that this disability prevents them from engaging in their work for at least 12 months or the expected result in death.

How to Get Disability Insurance

Some companies offer this type of insurance as part of their employee benefits and also pay for the premiums while some encourage you to buy it yourself to supplement the insurance they have for you.

Even if your company gives you disability insurance always check if you can keep the insurance while you are out of service and the cost.

Also you can personally buy disability insurance yourself with the help of an agent that will help you calculate the amount of insurance best for you to buy to cover your disability insurance.


Disabilities insurance is a very good insurance that covers policyholders that got an injury or illness that prevents them from earning their income but at the same type, there are exceptional illnesses caused while committing crimes or self-inflicted injuries. We have covered a lot about disabilities insurance also on how you can get it too. If you have any questions kindly leave them in the comment section below.

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