Disability insurance pays benefits when you are unable to earn a living because you are sick or injured. Most disability policies pay you a benefit that replaces a percentage of your earned income when you can’t work.
Why would you need disability insurance?
Your chances of being disabled for longer than three months are much greater than your chances of dying prematurely, due in part to medicine that has made many fatal illnesses treatable. (Source: 1985 Commissioner’s Individual Disability Table A–most recent data available.) Although this is good news, it increases your need to protect your income with disability insurance.