How does disability insurance work?

How the policy defines disability.  The best policies will insure you in your regular occupation. If disabled from performing the duties of your regular occupation, you will receive benefits, even if you can work in a different occupation.  Some policies will pay out a monthly benefit if an injury prevents you from working at your normal job, but allows you to do other types of work that will nonetheless reduce your income. Others will provide benefits only if you cannot work period.

• How much you will pay in premium. Just like any other type of insurance, this is the payment you must make each month to keep your coverage in force.
• How the policy defines disability. Some policies will pay out a monthly benefit if an injury prevents you from working at your normal job, but allows you to do other types of work that will nonetheless reduce your income. Other policies will not pay benefits if you are able to work in another type of profession, even if you earn less money.
• How much you will receive in benefits. In most cases, your benefit amount will be a percentage of your income. Policies typically pay 60 to 80 percent of what you earned before your disability.
• How long your benefits will last. The benefit period may be a certain number of months or years, or up to a certain age.

With this in mind, let’s take a closer look at what types of conditions that disability insurance covers.