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Disability Insurance

What is Disability Insurance?

Disability insurance is a monetary compensation plan provided by the government and/or an employer to support employees who are disabled due to illness or injury. Social Security Disability Insurance pays benefits to you and certain members of your family if you are "insured" meaning that you worked long enough and paid Social Security taxes.


Individual disability insurance is an insurance product designed to replace anywhere from 45-60% of your gross income on a tax-free basis should a sickness or illness prevent you from earning an income in your occupation. Every disability insurance policy from every insurance company is very different.


Disability insurance can be purchased either as an individual policy or on a group basis. Group disability insurance can be paid by an employer on a voluntary basis or in some combination with other methods. Typically disability insurance is provided on a short-term basis (i.e. 90 to 180 days) and on a long term basis (starting when short term disability ends for two or more years or to age 65).



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