Disability insurance, also known as income protection insurance, is a type of insurance policy that provides financial support to individuals who are unable to work due to a physical or mental disability.
This insurance is designed to replace a portion of an individual's income if they are unable to work due to an injury or illness, allowing them to maintain their standard of living. The amount of coverage, the duration of the coverage, and the definition of disability can vary among insurance policies, so it's important to carefully review the terms and conditions of any policy you're considering.
There are two main types of disability insurance: short-term and long-term. Short-term disability insurance provides coverage for a limited period of time, typically up to several months. Long-term disability insurance, on the other hand, provides coverage for an extended period of time, often until the policyholder reaches retirement age or until the policy is cancelled.
It's important to note that disability insurance is different from workers' compensation, which is typically required by law and provides benefits to employees who are injured on the job. Disability insurance, on the other hand, provides benefits to individuals who are unable to work due to a disability, regardless of whether the disability was caused by an on-the-job injury or by some other means.
If you're considering purchasing disability insurance, it's important to work with an insurance advisor to determine how much coverage you need and to choose a policy that meets your specific needs.
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