Disability insurance protection can be broken down into two basic categories of protection.
Short Term Disability Insurance
As the name implies, Short Term disability insurance pays income replacement benefits for a brief duration of only a few weeks or months. Most employer group insurance plans do not offer a short term disability benefit. Instead, many employers offer paid sick leave.
If you are self employed, short term disability coverage can be purchased alone or in addition to a long term disability benefit. However, many people do not buy this benefit but choose to use their personal savings until they become eligible to collect on their long term disability benefits.
Long Term Disability Insurance
Most long term disability insurance contracts pay a salary replacement benefit to age 65. This is the most common and important type of disability benefit and will be the focus of the remainder of this article.