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Disability Insurance

Disability Insurance Policies

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Disability insurance covers people given they are unable to work due to  a mental or physical health condition, including pregnancy, that affects their ability to complete job requirements. Disability Insurance is usually considered a workplace benefit included in the employee's compensation packet. Paid sick leave, short-term disability benefits (STD) for six months or less, and long-term disability benefits (LTD) for catastrophic circumstances are different aspects of this insurance. This type of insurance covers disabilities affecting on-the-job performance regardless of whether the injury or illness was caused at work or outside the workplace.

There are several types of insurance plans addressing employment disability situations. Each one provides for specific needs of workers and businesses. Individual plans provide security for those who are self-employed or work part-time. Plans provided through employers typically offer the most comprehensive type of disability coverage and are usually offered to full-time employees through benefits' packages. Government-funded programs such as the Consolidated Omnibus Budget Reconciliation Act (COBRA) or Social Security Disability Insurance (SSDI) offer assistance for chronically disabled individuals or those who may need to stay home to be caretakers for seriously ill family members.


Payment for benefit plans varies according to business guidelines, state laws and federal regulations. Accordingly, some employers might:

  • Pay all of the insurance premiums.
  • Require employees to co-pay a premium contribution each pay period.
  • Offer such insurance as an elective benefit with employees paying all premiums.

In other cases, self-employed individuals would pay 100 percent of all their costs while those with government plans might receive financial assistance. Factors that often influence disability premiums include:

  • An employee's age, position and expertise level.
  • Substitute personnel required to cover job responsibilities.
  • Benefit duration (short- or long-term).
  • Policy deductibles (high or low).
  • Number of benefits included in the plan.


When disability plans are used, out-of-work individuals typically receive a certain percentage of their monthly income as designated in their benefits package. This can be invaluable to help cover rent or mortgage, transportation needs, food, utilities or even medical expenses not covered by existing health insurance. Disability coverage also provides employers with a way to attract and maintain highly qualified workers with a comprehensive benefits' package.


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