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Disability insurance may be described as a form of insurance that has been designed so as to provide periodic income to the policyholder in the event of his/her inability to work because of sickness or injury. When the coverage is for longer than six months, it is termed long-term disability insurance. Usually a disability insurance policy is designed to pay out forty to sixty percent of an insured person's actual earnings, free from tax.

Source for disability insurance may be the individual, a policy provided by the government, or it may be included in an insurance package provided by your employer. In the event of termination or a job change, most employer-provided disability insurance coverage ends. In several U.S. states, a public disability insurance coverage scheme is made available, that is funded through payroll taxes.

The definition of total disability and renewability are among the most important factors to be considered when deciding on a disability insurance policy. There are three basic definitions of total disability. They are own-occupation disability insurance, gainful-occupation coverage, and income-replacement insurance. There are several basic types of renewability features that are prominent in disability insurance policies. They are non-cancelable and guaranteed renewable, conditionally renewable and guaranteed renewable.

There are other things to consider when checking out a disability insurance policy including residual disability insurance for persons who are actively engaged in their jobs but who are restricted due to sickness or injury. Also there is presumptive disability insurance, offering protection in the event of severe disabilities, and recurrent disability insurance that protects against a disability occurring soon after recovery from another disability. You must carefully consider such things as the elimination period, period of benefits, and any policy exclusions. There are also additional riders that are commonly available attached to disability insurance policies such as a rider for cost-of-living adjustment, the future-increase option, the automatic-increase rider, and the social-insurance-substitute rider, along with residual-disability insurance.