What does disability insurance cover?


Disability insurance covers everything from total to partial disability to disability so severe that the insurance company presumes that you won’t recover from it.

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Rebecca Shoenthal

Rebecca Shoenthal

Licensed Insurance Expert

Rebecca Shoenthal is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

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Anthony He

Anthony He

Disability Insurance Operations Manager

Anthony He is a disability insurance expert and the Operations Manager at Policygenius. He has 10 years of previous insurance experience and is a licensed agent in the state of New York.

Updated July 9, 2021|7 min read

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Disability insurance is like insurance for your paycheck. If you become disabled and can no longer work, your disability insurance company pays out funds that roughly equal your take-home pay.

Disability insurance may cover everything from total disability to rehabilitation and even the short period after you recover from your disability. Some policies also offer partial disability coverage and coverage for presumptive disabilities.

Virtually every type of illness or accidental injury is covered by disability insurance. Some injuries or non-illnesses could be covered as well, including complications from pregnancy and childbirth. Coverage exclusions, such as certain pre-existing conditions or occupational hazards, will be outlined clearly in your policy so there’s no mystery or confusion when filing a claim.

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Disability insurance is meant to replace your income when you become disabled.

Coverage for total disability

Total disability coverage kicks in if you become injured or ill and lose your ability to earn income. Your disability insurance will pay you benefits each month until you recover or your coverage expires, which should help pay the bills and maintain your standard of living.

What is a total disability?

A total disability falls under two main categories: own-occupation and any occupation. 

Own-occupation means that due to injury or illness, you cannot perform the main duties of your job, regardless of the employer. A court reporter who loses a limb and is no longer able to type is an example of own-occupation total disability. They would not be able to find work as a court reporter due to their disability. 

Any-occupation means that due to injury or illness, you cannot perform the main duties of any job that you are reasonably qualified to do. The same court reporter who loses a limb may not be able to type, but may be qualified to teach a class, for example. If they have a total disability any-occupation policy, then the insurer will not pay out disability benefits. 

How much total disability coverage do I need?

Your monthly benefit amount should be about 60% of your pre-tax income, or roughly equal your take-home pay. You may be able to purchase more coverage as needed or add a rider to cover increases in the cost of living.

Presumptive disability

Presumptive disability coverage is for when you suffer an injury or sickness so debilitating that the disability insurance company presumes that you’ll never be able to return to work.

Such disabilities include the permanent loss of:

  • Use of both hands, both feet, or one hand and one foot

  • Speech

  • Hearing in both ears

  • Sight in both eyes

Under most disability insurance coverage, you’ll have to wait out an elimination period of around 90 days (depending on your insurer) before your disability insurance company will pay benefits. Because of the nature of the loss, there is no elimination period for presumptive disability.

If your expected monthly benefits are too low to cover a presumptive disability, you can purchase a catastrophic disability rider. This rider increases your monthly benefit amount if you qualify for presumptive disability coverage and need near-constant assistance for physical activity or have a severe cognitive impairment.

Illnesses covered by disability insurance

According to the Council for Disability Awareness, most disabilities are not accident-related and are caused by illnesses. 

The top causes for long-term disability claims are:

  • Muscle, back, and joint disorders

  • Spine and nervous system-related disorders

  • Cardiovascular and circulatory diseases

  • Cancer and tumors

  • Accidents, injuries, and poisonings

Partial disability benefits

If you’re still able to work, but your disability has resulted in a partial loss of income, duties, or time, then you can still receive some benefits from partial disability insurance (also referred to as a residual disability benefit). If your disability insurance policy includes partial disability coverage, you’ll have to show that a doctor is treating you until you no longer benefit from medical care.

With partial disability insurance benefits, your monthly payments are usually reduced by the percentage of loss you suffered to your income, duties, or time. But some insurers may pay you your full monthly disability benefit for a partial period of time.

If you’re still partially disabled after that period of time ends, you may be eligible for extended partial disability coverage. If you were previously receiving the full monthly benefit, this could reduce it to be proportional to your loss of income.

Reach out to a licensed representative at Policygenius to learn more about residual disability benefits. 

How disability insurance helps your recovery

Your insurer may cover the costs of your rehabilitation to help you recover from your disability. Such expenses include training and care expenses as well as modifications to your home, vehicle, or workplace. 

Other insurers offer retraining benefits, which pay for the cost of going back to school to brush up on your training if you’ve been disabled for a long time. Retraining benefits cover expenses like tuition, books, and equipment, and can be used for vocational and business school.

Disability insurance may even cover you after you’ve recovered from your disability. Like partial disability coverage, a small amount of recovery benefits may be paid for a period of time if your disability causes you to lose a percentage of your income.

Disability insurance coverage for pregnancy

Most insurers cover complications from pregnancy and childbirth. Sometimes, this could mean conditions that don’t show up until weeks or even months after you give birth.

Long-term disability policies don’t insure coverage for a normal pregnancy, even if you miss work during your pregnancy or for maternity leave. 

Disability insurance coverage for mental illness

Certain types of pre-existing conditions may be excluded from coverage. Some insurers include mental illness among these exclusions, including anxiety, depression, and other types of nervous disorders.

Some insurers offer coverage for disabilities caused by alcohol and drug abuse, but coverage may be limited. If you abused alcohol and drugs prior to taking out the policy, they may be excluded from coverage.

If your mental illness is not excluded, or if it developed after taking out the policy, you may be able to receive disability benefits if it causes you to lose your ability to earn an income. However, there may be restrictions on how long you can receive benefits. Some insurers only cover mental illness for a set period of time that may be much less than your benefits period.

Does disability insurance cover dependents?

Some disability insurance policies include coverage that helps your loved ones. While not every policy offers these provisions, they’re worth asking your insurer about.

Survivor benefits

If you die while receiving disability insurance benefits, your insurer may pay a number of months’ worth of your usual monthly benefit to your spouse or child, similar to life insurance. Check your disability insurance policy for information on how to name a beneficiary.

Even if you have this benefit, you may still need an actual life insurance policy. Coverage from life insurance is far higher than that offered by disability insurance survivor benefits and pays out even if you don’t have a disability.

Compassionate disability

Compassionate disability benefits are paid to you if someone you care for becomes so disabled that you have to take time off work to care for them. You will need to show that you’re working fewer hours and have thus lost a certain percentage of your income.

What’s not covered by disability insurance

Certain conditions will make it difficult or impossible for your disability insurance application to be approved. Among them are serious illnesses, like cancer or a history of heart attacks.

People over the age of 60 are also unable to get disability insurance or may find it prohibitively expensive. As you approach retirement age, you’re less likely to have an income and therefore do not have the same need for disability insurance as younger adults. 

If you do get approved despite having a pre-existing condition, that condition may be listed as an exclusion in your policy. That means if you become disabled due to the condition, you won’t be eligible to receive benefits. The exclusion does not apply if the disabling injury or illness is caused by new trauma and is unrelated to the already known condition.

Disability caused by any of the following situations are also not covered:

  • Fighting in a war.

  • Committing a crime, participating in a riot, or during incarceration.

  • Self-inflicted and intentional injury.

With few exceptions, disability insurance covers all types of unexpected conditions, illnesses, and injuries, and can keep you and your loved ones financially stable until you’re able to work again. Talk to a Policygenius agent today for free to learn more about what type of coverage is best for you. 

What does disability insurance cover FAQs

What does disability insurance protect?

Disability insurance protects your paycheck if you lose your ability to work due to an illness or injury. This type of insurance pays a sum roughly equivalent to your take-home pay after the elimination period of 90 days.

What is covered by disability insurance?

Almost all types of accidents and illnesses, including complications from childbirth, depression, and cancer, are covered by disability insurance.

What are disability income benefits?

Disability income insurance provides benefits when you cannot perform your normal job requirements. Disability insurance pays a portion of your income until you are able to return to work.