What Is Disability Insurance & its Types?

Disability insurance provides risk coverage for the lost income due to failure to work in case of any permanent or temporary disability. This kind of insurance helps in providing a part of your lost income along with the medical expenses, if you happened to meet with an accident that led to disability.

There are many types of organizations that provide different types of disability insurance. Each organization and disability insurance type have specific rules as to what constitutes a disability and how a person might qualify to receive the disability benefit. This basic insurance is a key social justice concept.

Types of Disability Insurance :-

There are two basic types.Those are discuss below-

1. Short term disability insurance policies offer a worker a portion of their salary if they are unable to work for a short period—typically three to six months.

2. Long term disability insurance offers a worker a portion of their salary if they are unable to work for a longer period—typically a period of over six months.Both short term and long term disability policies have a period that a person must be disabled for before that individual is able to start receiving disability benefits.

That period of time is called an elimination period. If a person becomes disabled, they must wait until the elimination period is over before they start receiving benefits. If they are able to work before the elimination period is over, the person will not receive a benefit.

The Social Security Administration also provides disability insurance. Employees who’ve paid the Federal Insurance Contributions Act (FICA) tax for a certain amount of time, are eligible to receive the Social Security disability income insurance if they meet the strict requirements of disability under the OASDI program.

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