Disability insurance replaces a portion of your income if you were to become sick or injured and unable to work. It’s an important type of insurance coverage that is often overlooked, as few people stop to consider what would happen to their business and their personal income if they were unable to work. In addition, business owners should consider business overhead insurance, which reimburses a business for overhead expenses in the event a business owner becomes totally disabled. A policy typically pays benefits for one to two years and helps cover expenses like salaries, taxes, employee benefits, rent, mortgage, utilities, equipment, malpractice premiums, etc. That could mean the difference between a business surviving or shuttering its doors.

Disability insurance is one of the least understood types of insurance, but also one of the most important. Many people mistakenly believe that workers who become disabled will receive disabilitsy income either through Social Security, Worker’s Compensation or both. But Social Security disability benefits are often quite restrictive and employees don’t qualify for Worker’s Compensation unless the disabling illness or injury happened on the job.

Employer-sponsored disability income insurance is much less restrictive and falls into two main categories. Short-term disability insurance plans usually offer benefits that are paid for a maximum of 26 weeks, while long-term disability insurance benefits generally continue for the length of the disability or until retirement age. Cost can be affected by adjusting the maximum monthly benefit, benefit periods and waiting periods before benefits begin. This is another area where it’s possible to allow employees to purchase additional coverage either by purchasing increased benefits under the group program or through a voluntary benefit program.