Disability Insurance

Disability Insurance (pronunciation: /dɪsəˈbɪlɪti ɪnˈʃɔːrəns/) is a type of Insurance that provides income to a worker who is unable to perform their work and earn money due to a Disability.

Etymology

The term "Disability Insurance" is derived from the English words "disability", meaning a physical or mental condition that limits a person's movements, senses, or activities, and "insurance", a practice or arrangement by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment.

Types of Disability Insurance

There are two main types of Disability Insurance: Short-Term Disability Insurance (STD) and Long-Term Disability Insurance (LTD).

Short-Term Disability Insurance (STD) provides the policyholder with income for a short period of time, typically 3-6 months, if they are unable to work due to a disability.

Long-Term Disability Insurance (LTD) provides the policyholder with income for a longer period of time, typically until they are able to return to work or for the number of years stated in the policy.

Related Terms

Insurance - A practice or arrangement by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment.
Disability - A physical or mental condition that limits a person's movements, senses, or activities.
Policyholder - A person or group in whose name an insurance policy is held.
Premium - An amount to be paid for an insurance policy.
Benefit period - The length of time during which a benefit is paid.