Disability insurance
Insurance that replaces a portion of your income if you're unable to work due to illness or injury.
Last reviewed August 23, 2026
Definition
Disability insurance replaces a portion of your income if you become unable to work due to a covered illness or injury. It's often called "income protection", because that's exactly what it protects.
Two main types:
- Short-term disability (STD): Replaces a share of income for a limited period after an elimination period. Your plan document states the share, the period, and the elimination period.
- Long-term disability (LTD): Picks up after short-term benefits end. How long it runs, and under which definition of disability, is set out in the policy.
Employer-provided vs. individual: Group coverage through an employer and an individually purchased policy differ in what they replace, how long they run, whether the definition shifts over time, and whether benefits are taxable, which turns on who paid the premiums. Those terms are in the plan document and the policy, and a licensed agent can walk you through what yours say.
Own occupation vs. any occupation: "Own occupation" policies pay if you can't perform your specific job. "Any occupation" policies pay only if you can't perform any job you're reasonably qualified for. Your policy's definitions page states which applies to you, and it is a difference to confirm with your carrier.
Elimination period: The waiting time between becoming disabled and the first benefit payment. It is stated in the policy, and it is one of the terms that moves the premium.
Examples
A surgeon develops essential tremor and can no longer perform surgery. Whether an own-occupation policy pays in that situation turns on how the policy defines disability, which is on its definitions page.
Short-term benefits run out before long-term benefits begin, or they overlap. Which one your plan does is stated in the plan document.
An employer plan and an individual policy can both be in force at once. How they coordinate is set out in each one.
Frequently asked questions
What does my employer's disability plan actually say?
The terms to read for are the share of income replaced, whether bonuses and commissions are included, whether a dollar maximum applies, the elimination period, and whether the definition of disability shifts after a set time. All of them are in the plan document. A licensed agent can walk you through what yours says.
How long is the elimination period?
The elimination period is the waiting time between becoming disabled and when benefits begin. Short-term and long-term policies set it differently, and yours is stated in the policy. As a rule, a longer elimination period goes with a lower premium.
How does disability coverage interact with savings?
Disability coverage and savings both address the same risk, income stopping, over different time horizons. How they interact for your household depends on your expenses, your existing employer coverage, and how long your savings would last. A licensed agent can model that with you.
Related terms
Coverage gap
A situation where a household has no insurance or benefit coverage for a specific risk, event, or period of time.
COBRA
A federal law that lets you keep your employer-sponsored health coverage for a limited time after leaving a job, at your own expense.
Umbrella insurance
Liability coverage that kicks in after your auto or home insurance limits are exhausted, typically providing $1M+ in additional protection.
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