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Definition: Disability Income Insurance
Disability income insurance in the standard name given in industry for the plan that provides periodic payments and benefits to the disabled people when they are insured under the plan and are unable to work. The insurance product typically compensates for anywhere between 45% to 66% of gross income of the individual on a tax free basis, should the illness or disability of the individual prevent him from earning an income from his occupation.
Different corporations offer different insurance plans and under different schemes, one should primarily consider the following criteria in particular apart from the ones considered for general insurance plans, before finalizing on any disability insurance plans:
If or not the policy has a waiting period
Whether or not the policy covers long or short disabilities
If the policy covers disability caused by illness or accidents
Sometimes employers also offer disability insurance coverage based on the nature of the job, however a qualified insurance agent can assist the consumer with exploring the sources of income the consumer will need and have during the disability.