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Scott Smith Licensed Broker

By: Scott Smith



What is Disability Income Insurance?


Disability income (DI) insurance provides supplementary income in the event an illness or accident results in a disability that prevents the insured from working at their regular employment. Benefits are usually paid monthly so the insured can maintain a comparable standard of living and pay recurring expenses.

​​​​​​​Disability income (DI) insurance is designed to replace 60% of the insured’s gross income on a tax-free basis. Some policies include bonuses and commissions as income. The benefits are tax-free because the policyholder used after-tax dollars to pay premiums. The policy pays a benefit in the event illness or injury prevents the policyholder from earning their usual income in their occupation. 

Although some employer-offered plans and Worker Compensation can provide help during a disability, the quality and scope of the coverage may leave the disabled employee short of the protection they require. Many employer-offered plans are part of a suite of coverage and may not pay to the levels an employee needs to meet their expenses. Also, Worker Compensation only covers injuries as a result of employment.

Your income is most likely your biggest asset. Without it, it would be hard to support yourself and your loved ones financially, as well as keep your future plans on track. Individual disability income insurance can help you stay on track by protecting your income.

Features and Benefits; A Supplement, Not a Solution

This insurance is meant to act as a supplement that lets people support their families and pay their bills during illness. However, it’s not meant to completely replace income. For that reason, it usually replaces 65% of your gross income. If you get several different insurance policies, they will often offset each other, so you don't overshoot the 65% mark.

Short-Term or Long-Term Coverage

Disability income insurance benefits pay out a set amount of money periodically when a policyholder is sick or injured. It partially replaces the income they lost because of their inability to work.

You can pay this out over a short-term or long-term disability. For instance, Peter went on short-term disability when he was in an accident that broke his leg and was unable to work for 6 weeks. Whereas John was diagnosed with cancer and was told he would need 6 months to a year off work for treatment, so he went on long-term disability. In both cases, their benefits come in every month.

Based on Individuals

The premiums for this insurance are based on each person's needs. This includes their current health, age, occupation, and how much money they bring in while they are healthy.

Why Get Disability Income Insurance?

Disability income insurance is a crucial protection to have in place for anyone who relies on an income to pay bills. It’s part of a basic protection plan to ensure that a sudden injury or illness won’t completely destroy a person’s life. With this insurance, they can still pay their bills and support their families. This takes the pressure off so they can focus on getting better.

Who Should Get Disability Income Insurance?

Disability income insurance protects anyone who depends on their working income to pay their bills and ensures that they can still pay those bills if they're suddenly unable to work. People who should get this insurance include:

  • People who would have trouble making payments if they suddenly got sick or hurt and were unable to work for a while

  • Self-employed people

  • People with high-risk jobs

  • Skilled laborers

  • Unskilled laborers

  • People that don't have disability through an employer

  • People that want to be covered on and off the job regardless

Get a Disability Income Insurance Quote

Disability income insurance is a basic protection that anyone with bills needs to have to cover themselves in the event of an unexpected illness or injury. To learn more about the cost of disability insurance and who offers disability insurance, visit our website and get a disability insurance quote.

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