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Disability Insurance (DI)

Definition - What does Disability Insurance (DI) mean?

Disability Insurance, also known as income protection, is a type of insurance that protects workers' earned income in the event of a disability that may incapacitate them temporarily or permanently. This may be due to a work-related accident, illness, or injury outside of work.

Disability insurance covers paid sick leave, short-term disability benefits (STD), and long-term disability benefits (LTD).

Safeopedia explains Disability Insurance (DI)

Disability insurance provides protection to individuals and their families in the event of an illness or injury that incapacitates them from earning a living. Statistical data shows that in the United States a disabling accident occurs, on average, once every second, and nearly 18.5% of Americans are currently living with a disability.

Most employers offer some form of disability coverage to their workers, and coverage options vary between companies, occupations, states and countries. Individual disability insurance can also be purchased.

There are two general types of disability insurance: short-term and long-term. The first has a maximum benefit of up to two years while the second pays out benefits for the rest of the beneficiary's life. Employers may offer one of the two types of disability coverage or integrate both as part of the employee benefits package.

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