Disability insurance is financial protection in the event that something goes wrong that has specific negative outcomes for the insured. In this case, it provides protection against loss of earned income due to being unable to work following a covered health event that lasts longer than a certain amount of time.
If you sick or injured in a way that is covered by the policy in question and you need more time away from work to recover than you can get from sick leave, you need money coming in to help support yourself while you recover. This is where disability insurance comes in: It provides income while you recuperate.
There are various types of coverage, such as short term disability, long term disability and high limit coverage. If you will be out of work less than six months, this is typically where short term coverage comes into play. Long term disability is something than leave you impaired and out of work for a long time, sometimes years. High limit coverage helps make up some of the difference between standard coverage and the standard of living to which a high earner has become accustomed. This is not just frivolous indulgence. It can mean the difference between keeping your house or losing it during a period of being unable to work due to illness or injury. However, high limit coverage is typically a supplemental coverage, supplied for an extra charge.
One of the most common reasons for seeking compensation is due to an on-the-job injury. This type of coverage is a benefit that many employees will expect as a basic benefit. Employers often provide it so that if an employee is injured, they can take some time off, recuperate, and return to their job. When this type of coverage is not provided, it can create a barrier to hiring good people. If the job comes with risk of injury — and even office work comes with some risk of injury — people will want to know they are protected if they become unable to work simply because they were doing their job.