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.

  1. Waiver Of Premium For Disability ...

    Waiver of premium for disability is an insurance policy provision ...
  2. Credit Insurance

    Credit insurance is a type of insurance that pays off one or ...
  3. Total Permanent Disability (TPD)

    Total permanent disability (TPD) is a condition in which an individual ...
  4. Americans with Disabilities Act ...

    Legislation that became effective January 1, 2009 that expands ...
  5. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
  6. Disability-Income (DI) Insurance

    An insurance product that provides supplementary income in the ...
Related Articles
  1. Managing Wealth

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
  2. Financial Advisor

    How to Help Clients Who Have Become Disabled

    Disability can strike a client any time. Advisors should make sure clients are adequately insured against this risk and know what benefits are available.
  3. Retirement

    What If Social Security Disability Runs Out Of Money?

    The social security disability program is nearly bankrupt and could run out of money by 2016.
  4. Financial Advisor

    Disability and Business Overhead Coverage for the Self-Employed

    What every small business owner or professional needs to know about individual and business overhead disability income insurance plans.
  5. Financial Advisor

    Top 3 Financial Steps to Take on Disability

    Going on disability can be a stressful time financially. Here are 3 steps to take on disability to help protect against significant financial blowback.
  6. Financial Advisor

    How Do Workers' Compensation Benefits Work?

    What you need to know about Workers' Compensation benefits.
  7. Retirement

    Step by Step: Applying for Social Security Disability

    Applying for disability benefits is no easy task – but it's well worth your time and effort if a disability is preventing you from earning a living.
  8. Retirement

    6 Benefits You're Required by Law to Offer Your Employees

    Learn about the benefits that a business must offer to employees, such as family and medical leave, as well as various forms of insurance coverage.
  9. Insurance

    Insurance Do's and Don'ts for Young Doctors

    These are the insurance do's and don'ts for young medical professionals.
  10. Insurance

    Disability Insurance For Business Owners

    If you become injured and no longer able to work, would your business survive?
  1. What are the maximum Social Security disability benefits?

    The average Social Security disability benefit amount for a recipient of Social Security Disability Insurance (SSDI) in 2 ... Read Answer >>
  2. 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 >>
  3. Are My Social Security disability benefits taxable?

    In some situations and in some states, your Social Security disability benefits are taxable. Read Answer >>
Hot Definitions
  1. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  2. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  3. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  4. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  5. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
  6. Annuity

    An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income ...
Trading Center