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 ShoenthalEditor & Licensed Life Insurance ExpertRebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

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Anthony HeAnthony HeDisability 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.

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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 can 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.

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: any-occupation and own-occupation

  • Any-occupation: You cannot perform the main duties of any job that you are reasonably qualified to do. A court reporter who loses a limb may not be able to type, but may be qualified to teach a class, for example.

  • Own-occupation: 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.

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:

  • Hearing in both ears

  • Sight in both eyes

  • Speech

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

Under most disability insurance coverage, you’ll have to wait out an elimination period 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:

  • Accidents, injuries, and poisonings

  • Cancer and tumors

  • Cardiovascular and circulatory diseases

  • Muscle, back, and joint disorders

  • Spine and nervous system-related disorders

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 ends, you may be eligible for extended partial disability coverage. If you were previously receiving the full monthly benefit, this could reduce it to an amount proportionate to your loss of income.

Reach out to a licensed agent 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 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 provide coverage for a pregnancy with no complications, even if you miss work during your pregnancy or for maternity leave. 

Disability insurance coverage for mental health conditions

Certain types of pre-existing conditions may be excluded from coverage. Some insurers include mental health disorders 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 health condition 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 health-related disability for a set period that may be shorter than your benefit period.

Does disability insurance cover dependents?

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

  • Compassionate disability: Benefits are paid if someone you care for becomes disabled and 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.

  • Survivor benefits: If you die while receiving disability insurance benefits, your insurer may pay a number of months’ worth of your benefit to your spouse or child, similar to life insurance.

What’s not covered by disability insurance

Certain conditions 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. In general, having passive income from a pension or other investments might affect your eligibility for certain disability benefits.

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 for 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:

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

  • Fighting in a war

  • 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 to learn more about what type of coverage is best for you. 

Frequently asked questions

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 a waiting period.

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 replaces a portion of your income when you cannot perform your normal job duties due to an illness or injury.


Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

Expert reviewer

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.

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