Disability Insurance

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.

BREAKING DOWN '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.

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RELATED FAQS
  1. Is there a limit on the amount of disability insurance that I can buy?

    Disability insurance policies are designed to partially replace your income in the event that you become disabled and cannot ... Read Answer >>
  2. What is disability-income insurance?

    Disability-income insurance is insurance that provides financial benefits to a policyholder in the event of sickness or injury ... Read Answer >>
  3. What are the maximum Social Security disability benefits?

    Find out the maximum Social Security disability benefits for qualifying individuals and couples in 2015, including who is ... Read Answer >>
  4. Are my Social Security disability benefits taxable?

    Understand in which situations your Social Security disability benefits are taxable, as well as which states impose state ... Read Answer >>
  5. What's the difference between casualty insurance and disability insurance?

    Casualty insurance is often called "property casualty insurance", and it provides insurance protection for your property ... Read Answer >>
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