1. Disability Insurance
Personal Finance

2. Definition of Disability
Unable to engage in the important duties of your occupation
Can’t do your job anymore
Unable to engage in he important duties of any occupation for which you are reasonably suited for
Can’t work at any job
Of course, premiums for the first definition will cost more
Some policies use the first definition for five years and then switch to the second definition
Social Security uses the second definition
Some policies reduce your benefits if you qualify for S.S. disability benefits

3. Disability Insurance
You can never get disability insurance to fully replace your income
Moral hazard problem
Premiums are based on your age, sex, health, and occupation
Good disability insurance is not cheap
Benefits are usually stated as a monthly income lasting:
For five years
Till age 65
Lifetime
Benefits are tax-free if the premiums were not tax deductible
You are (statistically) more likely to become disabled than to die