What are the two main types of disability insurance?

The two main types of disability insurance are short-term and long-term disability insurance. Short-term disability insurance generally provides income replacement for a limited period after an individual becomes unable to work due to a disability, typically covering a few weeks to a few months. This type of insurance is beneficial for individuals who may have temporary injuries or illnesses that prevent them from performing their job for a short duration.

Long-term disability insurance, on the other hand, offers coverage for an extended period, often lasting several years or until the individual reaches retirement age. This type is crucial for those who face severe or chronic conditions that could impair their ability to work over a longer timeframe.

Both types serve the purpose of providing financial support to individuals unable to perform their jobs due to disability, but they differ significantly in terms of duration and coverage. This distinction is essential for individuals to understand when considering their income protection needs and planning for unforeseen circumstances that may affect their ability to earn a living.