Home > Disability Insurance Often considered complementary to health insurance, this type of insurance serves to protect the policy holder if they sustain a disabling injury, accident, or illness and cannot continue to work at their current occupation. The coverage works by paying a steady monthly income to the beneficiary in times when they have no income due to the unemployment. The payments maintain the insured person's standard of living, and especially help to support financial obligations on the part of the policy holder, such as mortgages, loans, tuition, retirement funding, and other bills. Often this type of insurance may be of great value, because statistics show that most people will become disabled for 30 days or more before they turn age 65. The Three Types of Disability Insurance in the U.S. There are both public and private ways of gaining disability benefits in this country. Social Security Disability - Citizens may be able to gain these types of benefits if they qualify for payments. In order to qualify, an applicant must meet the Social Security Administration's definition for a disability. They must be unable to work for a year or more. And further, they must have accumulated a certain number of work "credits", usually 40, in order to qualify. Credits are gained by a person if they work and pay social security taxes for a certain amount of time. A credit is proportional to the amount of income a person earns; $920 per quarter must be earned for a credit, and up to 4 credits per year can be earned. Generally 40 credits are required for benefits, and cash payments may begin 6 months after the disability has struck. Employer Paid Disability Insurance - Many states require that employers provide this type of insurance to their employees. Otherwise known as group disability, sometimes these policies don't offer quite the benefits of individual policies. For instance, many employers try to avoid replacing 100 percent of an employees income in order to act as an incentive for them to go back to work. Individual Disability Income Policies - These plans are normally purchased by an individual as a measure of safeguarding their income. An individual policy holder has more options regarding policy structure, including the monetary amount of coverage desired, the waiting period before payments start, and also the duration that the payments are to be made. Short Term / Long Term Disability In addition to public and private, disability can be divided further into two more types. STD or Short Term Disability - There is a shorter waiting period of two weeks or less before payments, and a benefit period duration of less than two years. LTD or Long Term Disability - There is a longer waiting period of at least several weeks before payments, and a longer benefit period duration, potentially extending until the end of lifetime. Premiums Premiums are determined by establishing the relative risk of the occupation; safer jobs require lower premiums, and dangerous jobs require higher premiums. Common Exclusions Exclusions to legitimate claims may include disabilities caused by: conditions which existed prior to applying for coverage, suicide or any self inflicted injury, and pregnancy.