Disability insurance is primarily used as income replacement when you’re unable to work due to illness or accidental injury. Generally, this means you’re unable to do your job or unable to work at all, depending on your policy. This can include both physical injury and physical or mental illness, though exactly what’s covered will vary by the insurance company and your individual plan.
Some disability insurance also includes coverage for expenses arising as a result from a disability such as office expenses while you recuperate, if you’re self-employed.
The benefits are usually less than your pre-disability, pre-tax income. Sometimes it is a fixed amount while other insurers may calculate it as a percentage.
You’ll receive these benefits after the waiting period until the end of your benefit period, you reach the maximum benefit amount, or you return to work successfully.