Purpose: Disability insurance aims to cover the financial impact of losing income when someone becomes disabled and cannot work.

How it works: Disability insurance policies typically provide a monthly payment which is a portion of the policyholder’s previous income, for a set period of time, often until the insured individual is able to return to work or time period chosen at the purchase of the policy.

Types of Coverages: Owner Occupation and Non-owner Occupation

Coverage: Disability insurance can cover various disabilities, including injuries, illnesses, and mental health conditions that prevent an individual from working.

Employer-sponsored coverage: Some employers offer disability insurance as a benefit to their employees.

Individual policies: Individuals can also purchase disability insurance policies to provide additional coverage or to fill gaps in employer- sponsored plans.