What is a Typical Disability Insurance Benefit?

Nicole Madison
Nicole Madison
Nicole Madison
Nicole Madison
Doctor taking notes
Doctor taking notes

A typical disability insurance benefit usually amounts to a significant percentage of a policy holder's regular income. Disability insurance benefits may vary from plan to plan, but many programs provide about 50 to 70 percent of a policy holder's regular income as a benefit. The amount of time for which a person may receive a disability insurance benefit may vary as well. Typically, however, short-term disability plans provide benefits for up to about a year or two, and many feature an average benefit term of about two to three months. In contrast, long-term disability insurance benefits typically last for more than two years.

Not all disability insurance plans are created equal, and the benefits and features provided may differ with each one. A typical policy, however, will usually pay a percentage of the weekly income a person would normally receive from work or self-employment. Most policies provide between 50 and 70 percent of a policy holder's income, and policies that pay 70 percent are among the most common. While this may leave a person lacking some of the income he is used to, many people agree that receiving a significant portion of one’s income is better than not receiving any of it.

Typical disability benefit payment time frames fall into two basic categories: long term and short term. A short-term disability policy may include benefits for up to two years. Often, however, these plans pay benefits for even shorter periods of time. For example, many pay benefits for just a few months rather than a year or more. This may seem a short period of time to have coverage, but individuals who want extended coverage may choose long-term insurance instead.

The term of disability insurance benefit coverage a person may enjoy with long-term disability coverage depends on the plan. Most, however, pay benefits for two years, five years, or up to the time a person reaches retirement age. In fact, there are even some plans that pay benefits for a lifetime if necessary. Most disability insurance policies do, however, restrict the payment of benefits to a specific length of time or end them at a particular age.

Individuals usually have many choices when it comes to choosing a disability insurance plan. As such, a person may choose one that offers a higher disability insurance benefit or pays benefits for a longer term. In most cases, however, longer coverage and higher benefits also translate to higher insurance premiums.

Nicole Madison
Nicole Madison

Nicole’s thirst for knowledge inspired her to become a wiseGEEK writer, and she focuses primarily on topics such as homeschooling, parenting, health, science, and business. When not writing or spending time with her four children, Nicole enjoys reading, camping, and going to the beach.

Nicole Madison
Nicole Madison

Nicole’s thirst for knowledge inspired her to become a wiseGEEK writer, and she focuses primarily on topics such as homeschooling, parenting, health, science, and business. When not writing or spending time with her four children, Nicole enjoys reading, camping, and going to the beach.

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    • Doctor taking notes
      Doctor taking notes