ⓘ Disability Insurance, often called DI or disability income insurance, or income protection, is a form of insurance that insures the beneficiarys earned income a ..


ⓘ Disability insurance

Disability Insurance, often called DI or disability income insurance, or income protection, is a form of insurance that insures the beneficiarys earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. For example, the worker may suffer from an inability to maintain composure in the case of psychological disorders or an injury, illness or condition that causes physical impairment or incapacity to work. It encompasses paid sick leave, short-term disability benefits, and long-term disability benefits. Statistics show that in the US a disabling accident occurs, on average, once every second. In fact, nearly 18.5% of Americans are currently living with a disability, and 1 out of every 4 persons in the US workforce will suffer a disabling injury before retirement.


1. History

In the late 19th century, modern disability insurance began to become available. It was originally known as "accident insurance". The first company to offer accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the rising number of fatalities on the nascent railway system. It was registered as the Universal Casualty Compensation Company to:

.grant assurances on the lives of persons travelling by railway and to grant, in cases, of accident not having a fatal termination, compensation to the assured for injuries received under certain conditions.

The company was able to reach an agreement with the railway companies, whereby basic accident insurance would be sold as a package deal along with travel tickets to customers. The company charged higher premiums for second and third class travel due to the higher risk of injury in the roofless carriages.


1.1. History Individual disability insurance

Those whose employers do not provide benefits, and self-employed individuals who desire disability coverage, may purchase policies. Premiums and available benefits for individual coverage vary considerably between companies, occupations, states and countries. In general, premiums are higher for policies that provide more monthly benefits, offer benefits for longer periods of time, and start payments of benefits more quickly following a disability claim. Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances thus covering more insurances that the individual was going to purchase. Web-based disability insurance calculators assist in determining the disability insurance needed.


1.2. History High-limit disability insurance

High-limit disability insurance is designed to keep individual disability benefits at 65% of income regardless of income level. Coverage is typically issued supplemental to standard coverage. With high-limit disability insurance, benefits can be anywhere from an additional $2.000 to $100.000 per month. Single policy issue and participation individual or group long-term disability coverage has gone up to $30.000 with some hospitals.


1.3. History Business overhead expense disability insurance

Business Overhead Expense BOE coverage reimburses a business for overhead expenses should the owner experience a disability. Eligible benefits include: rent or mortgage payments, utilities, leasing costs, laundry/maintenance, accounting/billing and collection service fees, business insurance premiums, employee salaries, employee benefits, property tax, and other regular monthly expenses.


1.4. History National social insurance programs

In most developed countries, the single most important form of disability insurance is that provided by the national government for all citizens. For example, the UKs version is part of National Insurance; the U.S.s version is Social Security SS - specifically, several parts of SS including Social Security Disability Insurance SSDI and Supplemental Security Income SSI. These programs provide a floor beneath all other disability insurance. In other words, they are the safety net that catches everyone who was otherwise a uninsured or b underinsured. As such, they are large programs with many beneficiaries. The general theory of the benefit formula is that the benefit is enough to prevent abject poverty.

In addition to federally funded programs, there are five states which currently offer state funded Disability Insurance programs. These programs are designed for short term disabilities only. The coverage amount is determined by the applicants level of income over the previous 12 months. The states which currently fund disability insurance programs are California, New York, New Jersey, Rhode Island, and Hawaii.


1.5. History Employer-supplied disability insurance

One of the most common reasons for disability is on-the-job injury, which explains why the second largest form of disability insurance is that provided by employers to cover their employees. There are several subtypes that may or may not be separate parts of the benefits package: workers compensation and more general disability insurance policies.


1.6. History Workers compensation

Workers compensation offers payments to employees who are usually temporarily, rarely permanently unable to work because of a job-related injury. However, workers compensation is in fact more than just income insurance, because it compensates for economic loss past and future, reimbursement or payment of medical and life expenses functioning in this case as a form of health insurance, and benefits payable to the dependents of workers killed during employment offering a form of life insurance. Workers compensation provides no coverage to those not working. Statistics have shown that the majority of disabilities occur while the injured person is not working and therefore is not covered by workers compensation.

Newsweek magazines cover story for March 5, 2007 discussed the problems that American veterans of Afghanistan and Iraq wars have faced in receiving VA benefits. The article describes one veteran who waited 17 months to start receiving payments. Another article, in The New York Times, points out that besides long waits, there is also variation based on the veterans state of residence and whether he/she is a veteran of the Army, National Guard, or Reserves. The Newsweek article says that it can be difficult for a veteran to get his or her claim approved; Newsweek described the benefits thus:

"A veteran with a disability rating of 100 percent gets about $2.400 a month - more if he or she has children. A 50 percent rating brings in around $700 a month. But for many returning servicemen burdened with wounds, it is, initially at least, their sole income."

The 2007 figures cited above correspond in 2012 to $2.673 a month more with children and, for the 50% rating, $797 a month for a single veteran.

According to a sidebar in the same Newsweek article, the Americans injured in these wars, for all the obstacles to proper care, will probably receive much better compensation and health care than equally injured Afghan or Iraqi soldiers.

  • Social Security Disability Insurance SSD or SSDI is a payroll tax - funded federal insurance program of the United States government. It is managed by
  • California State Disability Insurance SDI or CASDI is a statutory state - regulated and state - audited state disability program of the State of California
  • Total Permanent Disability TPD is a phrase used in the insurance industry and in law. Generally speaking, it means that because of a sickness or injury
  • State disability insurance is a program for those workers who are ill, unable or injured. It is a type of insurance that should partially replace wages
  • The National Disability Insurance Scheme NDIS is a scheme of the Australian Government that funds costs associated with disability The scheme was legislated
  • of insurance products designed to manage the cost of medical care. Other types of insurance in this category include health insurance disability insurance
  • The National Institute for Health and Disability Insurance NIHDI is a so - called federal public body of social security in Belgium. Under the authority
  • Retirement, Survivors, Disability Insurance RSDI was part of Franklin D. Roosevelt s New Deal during the Great Depression. The insurance took to the form
  • company offers a wide range of insurance products and services, including life insurance disability income insurance annuities, investments, dental
  • with disabilities Social Security Disability Insurance provides benefits to individuals who have worked and paid Social Security taxes. Insurance eligibility
  • involved in government social insurance programs. The largest of these programs is Old age. Survivors and Disability Insurance Program OASDI It provides