Disability Insurance

AAA

DEFINITION of 'Disability Insurance'

A program managed by the Social Security Administration that insures a worker in case of a mishap. Disability insurance offers income protection to individuals who become disabled for a long period of time, and as a result can no longer work during that time period. Employees who've paid the Federal Insurance Contributions Act (FICA) tax for a certain amount of time, are eligible to receive the Social Security disability income insurance.


Also referred to as disability-income insurance.

INVESTOPEDIA EXPLAINS 'Disability Insurance'

The Federal Insurance Contributions Act (FICA) is a United States law that requires employees to contribute a part of their earnings to fund Medicare and Social Security. Employees who have become disabled can receive this income insurance for at least one year. Income insurance payments begin on the sixth month of disability.

RELATED TERMS
  1. Waiver Of Premium For Disability ...

    A provision in an insurance policy that states that the insurance ...
  2. Disability Insurance Trust Fund

    An account within the Social Security Trust Fund used to pay ...
  3. Medicare

    A U.S. federal health program that subsidizes people who meet ...
  4. Social Security

    A United States federal program of social insurance and benefits ...
  5. Disability-Income (DI) Insurance

    An insurance product that provides supplementary income in the ...
  6. Federal Insurance Contributions ...

    A U.S. law requiring a deduction from paychecks and income that ...
Related Articles
  1. What You Need To Know About COBRA Health ...
    Insurance

    What You Need To Know About COBRA Health ...

  2. 5 Insurance Policies Everyone Should ...
    Home & Auto

    5 Insurance Policies Everyone Should ...

  3. Talking To Aging Parents About Money
    Retirement

    Talking To Aging Parents About Money

  4. Human Capital: The Most Overlooked Asset ...
    Investing Basics

    Human Capital: The Most Overlooked Asset ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center