Disability insurance will pay a portion of your income if you are unable to work for an extended period of time due to an injury or illness. There are two types of disability insurance: short-term disability insurance and long-term disability insurance. As the name implies, short-term disability insurance replaces much of your paycheck (up to 80%) for a short period of time—usually three to six months—and is often available through your employer as a free employment benefit or at low cost. And long-term disability insurance replaces some of your paycheck if you are unable to work for years or decades—sometimes until retirement. Long-term disability insurance is not often provided by employers—but you may purchase an individual policy. Because long-term disability insurance often does not pay enough to cover your expenses, some people purchase supplemental long-term disability insurance policies.
